JTC's tender for soil investigation indicates land preparation
MORE refinery expansion and upgrading investments can be expected at the Chawan/Merlimau sectors of Jurong Island where ExxonMobil's 605,000 barrels per day (bpd) and Singapore Refining Company's (SRC) 290,000 bpd refineries are located, industry sources say.
Further signs of this emerged this week with JTC Corporation calling a tender for soil investigation there - its second in 10 months in the same area - although this time, it is understood to cover a different part of Chawan/ Merlimau.
Soil investigation work usually precedes reclamation, which takes about one-and-a-half to two years, contracting sources said of JTC's usual land preparation to meet investors' needs.
SRC - which has apparently indicated to JTC its interest in more land there - will want it for expected new projects, especially with the financial muscle which its new incoming partner Chinese oil giant PetroChina will bring to the joint venture refinery with Chevron.
Sources said that ExxonMobil (EM) - currently building a second petrochemicals complex at Chawan, costing US$5 billion - is also considering a refinery expansion plus upgrading projects such as a desulphuriser to produce low-sulphur transportation fuels such as petrol and diesel.
When contacted, an EM spokeswoman would only say that 'we continuously look at investment opportunities to meet growing Asia-Pacific demand'.
On the possibility of upcoming projects, an industry observer said that 'it is not surprising, as every refiner is looking at projects which can improve its long-term competitiveness and complexity'.
SRC, which will shortly be starting up its just-revamped hydrosulphuriser - a US$81 million project to produce ultra-low sulphur diesel - is carrying out front-end design on its next upgrading investment to produce ultra-low sulphur gasoline (ULSG).
While it currently has sufficient land for the ULSG upgrading project, SRC will need more space in future, given the strong likelihood of PetroChina wanting to grow its refinery foothold in Singapore.
'What is certain is that PetroChina can further grow SPC, which is something KepCorp realises it cannot do, unless it is prepared to invest much more in the SRC refinery,' an industry source earlier said of KepCorp's move to sell its entire 45.51 per cent stake in SPC to PetroChina.
Following that, the Chinese oil giant is expected to make a general offer for SPC of around $3.2 billion.
PetroChina has also indicated that the Singapore refinery - which its officials have previously visited - 'will give it a new platform for its international strategy'.
With some additional investments to the Singapore facility, PetroChina would be able to refine imported heavy crudes here, such as those from Venezuela, with the finished products sold to markets such as Indonesia, Vietnam and southern China.
Source: Business Times, 17 June 2009