Increased Refining Capacity Calls for More Terminals in Singapore

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Researched by Industrial Info Resources (Sugar Land, Texas)--Singapore currently has the world's third-largest refining industry, after Rotterdam, Netherlands, and Houston, Texas. The three main refineries, owned by ExxonMobil Corporation (NYSE:XOM) (Irving, Texas), Singapore Refining Corporation (SRC) (Singapore) and Royal Dutch Shell plc (NYSE:RDS.A) (The Hague, Netherlands), have a throughput capacity of about 1.4 million barrels per day (BBL/d). SRC is a joint venture between Chevron Corporation (NYSE:CVX) (San Ramon, California) and PetroChina Company Limited (NYSE:PTR) (Beijing). ExxonMobil operates the largest of these refineries, which is the fifth-largest in the world and has a daily throughput capacity of 605,000 barrels.

Since the mid-1990s, Singapore has also been on the path to becoming Asia's premiere petrochemical and chemical hub. This direction was finally cemented when a 10-year downstream master plan, called Jurong Island Version 2.0, was announced last year. The plan involves further development of Singapore's refining and petrochemical industries by increasing the complexity and integration of refining. Recent announcements of a new refinery to be headed by a consortium lead by Hin Leong Trading Limited (Singapore), the country's largest oil trader, seem to support the idea of Jurong Island Version 2.0. The proposed refinery could boost Singapore's refining capacity by at least 300,000 BBL/d.

A new refinery would boost Singapore's petrochemical capacity and would require the construction of new terminals in order to support the increase in refined products. Asia Tank Terminal Limited (ATTL) (Singapore), a joint venture between Vitol Group (Rotterdam) and MISC Berhad (MYX:3816) (Kuala Lumpur, Malaysia), has begun construction on one such terminal at Tanjung Pelepas Port. Though the planned 39 tanks, scheduled for completion in the first quarter of 2012, will be able to store 814,000 cubic meters of refined products such as fuel oil, naphtha and jet fuel, the area acquired could easily house up to 1.4 million cubic meters in storage. ATTL is expecting costs for the initial 39 tanks to equal about $174 million.

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