Greenlight Given for Shell’s 800,000-Ton Ethylene Cracker in Singapore

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Researched by Industrial Info Resources (Sugar Land, Texas). The prospect of continued growth for petrochemical-based products in China, as well other countries in Asia, is pushing the continuing rollout of new large-scale, integrated petrochemical project plans in the region. Shell Eastern Petroleum (NYSE:RDS ) (SEPL) (London, United Kingdom) announced in the last week of July that the final investment decision had been made to proceed with the construction of a world-scale ethylene cracker and monoethylene (MEG) plant on Bukom Island in Singapore.

The ethylene and MEG plants will be fully-integrated with the existing Bukom refinery, which will create an advantaged site enabling feedstock and operating benefits. Foster Wheeler UK (NYSE:FWLT ) (Clinton, New Jersey) was awarded the basic engineering and design package (BDEF) for the modifications to the Bukom refinery in 2005.

The new ethylene plant will have a production capacity of 800,000 tons per annum (tpa) and the output will be used as feedstock for the 750,000 tons per annum MEG plant and existing joint venture downstream derivative plants. It will also be fed to other major customers on nearby Jurong Island through existing undersea pipelines.

The BDEF contract on the project was reported to be ‘doing well’ and construction on the ethylene plant is scheduled to start later this year. Start-up of operations for the new plant, integrated with the modified refinery, is scheduled for the end of 2009 or the beginning of 2010. The BDEF contract for the ethylene cracker is being executed by a joint venture between ABB Lummus Global (NYSE:ABB ) (Zurich Switzerland) and Toyo Engineering Corporation (NYSE:6330 ) (Tokyo, Japan).

Shell will provide proprietary technology for the MEG plant and output product will be sold in the region. Foster Wheeler and Mitsubishi Chemical Engineering (NYSE:4188 ) (Tokyo, Japan) are the design engineers for the MEG project.

The new project has been developed by SEPL and the Singapore Economic Development Board (SEDB), and is seen as helping Shell to retain a competitive edge at a time when petrochemical prices are rising in reaction to the advancing price of crude oil feedstock over a number of years. The cost of shipping a ton of ethylene in the Asian region has risen by around 130% to $115 per ton since 2002. But with Asian/Chinese demand roaring along, the new plant will be supplying a region that could represent over 50% of global demand for petrochemical products through 2015.

Rob Routs, Shell Group Managing Director as well as the Downstream Executive Director, said, ” This project represents another significant step in Shell’s commitment towards delivering a profitable downstream business for the group. Shell is committed to growing chemical investments in Asia Pacific and the Middle East and today’s announcement is another example of how we are delivering on that strategy.”

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