10 January 2014

B YRONNIE LIM RONNIE@SPH.COM.SG PRINT

Growth story: At an exhibition with Mr Lee (right) after the opening of the expansion of the ExxonMobil Singapore Chemical Plant yesterday are (from left) Georges Grosliere, manufacturing director of the plant; Mr Tillerson; and Mr Pryor. - PHOTO: MARK CHEONG/THE STRAITS TIMES

[SINGAPORE] ExxonMobil's (EM) new, second petrochemical complex here - costing an estimated US$5 billion-US$6 billion - is the US energy giant's largest investment here and also Singapore's largest manufacturing investment ever, said Prime Minister Lee Hsien Loong who opened the expansion yesterday, bringing EM's total investment here to well over US$10 billion.
"But that's not the end of the story," EM Chemical's president, Steve Pryor, assured, disclosing that the group was already planning additional specialty plant investments here, including for butyl rubber used for tyres, and premium resins for adhesives.
"ExxonMobil views the Singapore complex as a platform for future growth," he added.
In fact, EM's top brass, led by group chairman and CEO Rex Tillerson, earlier met the Economic Development Board on Tuesday for discussions including on its future projects here, and followed this up yesterday with another meeting with PM Lee at its Jurong Island facility, prior to the inauguration proper.
EM's second petrochemical complex here - comprising one million tonnes per annum ethylene cracker, six downstream plants plus a dedicated 220-MW cogeneration unit - saw project ground-breaking in 2007, with construction completed only in end-2012, with the complex fully operational since last May.
The US group's plan to further grow its integrated refining / petrochemicals facility here - already the group's largest manufacturing site worldwide - is premised on Asia and the Asia-Pacific driving global economic growth between now and 2040. "We expect global chemical demand to grow at a faster pace than GDP... and two-thirds of the growth in chemical demand will be here in the Asia-Pacific," said Mr Tillerson.
In that respect, "the Singapore chemical plant is uniquely positioned to serve these growth markets - from China to the Indian subcontinent and beyond", he added.
This is especially as its integrated Singapore complex - comprising a 605,000 barrels refinery and two petrochemical complexes with total cracking capacity of 1.9 million tonnes per annum - now accounts for about 25 per cent of the group's global chemicals capacity.
Mr Pryor explained that when EM built its first petrochemical complex here back in 2001 "it marked a strategic shift in our manufacturing footprint to Asia", adding that "it also reflected our belief that Singapore would be the optimal base for serving the market in Asia".
While EM also has a 25 per cent stake in a similar, but much smaller, joint-venture complex in China, its output only serves the local market. On the other hand, the Singapore facility is 100 per cent owned and operated, which gives it maximum flexibility and makes it an ideal site to develop and commercialise breakthrough technologies, Mr Pryor told ICIS Chemical Business.
As such, EM's plan to invest in more plants here to produce halobutyl rubber and tackifying resins "can provide a support for earnings even where there is a downturn in the commodity business", he said in the ICIS handout.
Apart from being its largest manufacturing project, its new Singapore petrochemical complex is also its most technologically advanced, and incorporates over 40 new proprietary technologies, added Mr Pryor. Its cracker is the first in the world to be able to use crude oil as a feedstock, thus lowering feedstock costs. This also saves energy and reduces emissions by eliminating the refining steps needed to produce naphtha feedstock.
And, just as it had relocated a part of the original Jurong Island Highway to make way for the new EM expansion, PM Lee assured yesterday continued government support for Singapore's energy and chemicals industry, which he said is "one with a bright future". This is despite looming challenges like global competition from rival hubs in the US, China and Europe, increasing global concern over carbon emissions, and domestic constraints of foreign labour and land here.
Singapore, he said, will continue to upgrade Jurong Island, like for example, building an LPG terminal to import another alternative feedstock for the petrochemical crackers here. Vopak just last month announced it will spearhead this project, with EM signed on as its first anchor tenant.
Support will also come from the Republic upgrading the "software" here, like growing a skilled workforce, and also working closely with the industry to be more environment-friendly, he added.