Investments in Singapore's Jurong Island burgeoning chemicals industry are expected to double to $23.52 billion from the current level of commitments of $12.35 billion over the next 10 years.
About 50 companies are producing $6.47 billion/year worth of petrochemicals on the island already, according to Minister for Trade and Industry Lim Swee Say. The chemicals cluster-which includes petrochemicals, pharmaceuticals, and other specialty chemicals-accounts for 21.5% of the value of Singapore's manufacturing sector last year. The sector is being built up as a second leg of manufacturing to reduce Singapore's dependence on electronics. Both Singapore's Economic Development Board and the Jurong Town Corp. are developing the island as a world-class petrochemicals hub.
The Singapore government aims to raise the chemical sector's share even higher-to 30% of manufacturing output-by 2005. Nearly $2.94 billion has been invested by the government in reclamation and infrastructure development on Jurong Island, which has been created by merging a cluster of seven islands with an original land area of 991 hectares. With reclamation, the island has now grown to 1,800 hectares. And, by yearend 2001, it will reach its final size of 2,600 hectares, or equal to 90% of Singapore's largest industrial estate, Jurong. Jurong Island would then be able to support about 150 companies and five ethylene crackers.
Power, fuel concerns
Over the long term, says Lim, the Singapore government is considering using LNG to diversify the sources of power for the island. An LNG terminal would be built on 30 hectares of reclaimed land in Tuas View. New utilities, including waste water treatment and incineration plants, would be built on another 40 hectares of land but not directly on Jurong Island, due to a higher-than-expected land take-up rate and a consequent need to conserve valuable space on the island.
At present, Singapore's total energy fuels demand mix break out as: 77% fuel oil, 14% natural gas, and the remaining 9% is diesel. In 10 years, Lim estimates, the share of natural gas in Singapore's energy requirements will rise to 20-25%. Lim said that, despite competition from Thailand, Jurong Island would still be attractive because of its integrated downstream chemical clusters that can share facilities and complement one another.
Increasing feedstock
Singapore's ethylene derivatives chemical industry is expected to have enough feedstock to last until 2003. It is believed, therefore, that at least another naphtha cracker will be needed shortly to supply feedstock for the downstream chemical plants, says Singapore Economic Development Board (EDB) Chairman Philip Yeo. The EDB, Yeo says, is still working to attract more downstream chemical plants to build up demand for ethylene, rather than have companies build ethylene plants and look for customers downstream.
Singapore has two naphtha crackers now running, both owned by the Petrochemical Corp. of Singapore. The country aims for capacity of 3 million tonnes/year of ethylene from about five cracker plants in the near future.
Yeo hopes Exxon Corp.'s $2 billion naphtha cracker-based complex-the country's third-will be on stream in 2001-02 (see story above) Exxon's planned 800,000-tonne/year output would bring Singapore's total capacity to 1.8 million tonnes/year. A proposed $800 million cracker plant was supposed to be built by Mobil Corp., but there has been no word on the project since the company's announcement of a merger with Exxon. Yeo added that Mobil's plant may still be built, saying that the delay would have no impact on chemical supplies at present.
Uncertainty
Mitsui Chemical Pres. Hiroyuki Nakanishi alluded to the uncertainty over the Mobil plant as the reason it was reviewing its decision to set up a 300,000-tonne, high-density polyethylene plant in Singapore. The big assumption was that Mitusi would have the very best ethylene available for the plants, he said. Unfortunately, he added, there had been a big change in plans of those companies involved in planning naphtha crackers in Singapore, so the company had to change its plans accordingly, he said.
If cost-comparative ethylene feedstock were not available in Singapore, Mitsui would look to set up its plant elsewhere in Southeast Asia. Mitsui would not rule out setting up its own naphtha cracker in Singapore, says Hiroyuki, but it has no specific plans to set up any more plants in the island republic at the moment. Still, Singapore is one of the favored candidates for expansion, especially in the downstream phenol business. Mitsui is building a bisphenol-A plant next to its phenol plant there.
