Shell to go ahead with Singapore petrochem cracker without Sumitomo

14-Feb-05

When Shell's long-time partner Sumitomo pulled out of a petrochem JV in Singapore in May this year, to focus on a US$4.3 billion petrochemical complex in Saudi Arabia, plans for the cracker came to a standstill. However, Shell has decided to go ahead with the Singapore project without Sumitomo. Shell is collaborating with the Singapore Economic Development Board, including the issue of equity stakes. The naphtha cracker project is potentially worth at least S$1.6 billion, with an estimated production capacity of about 1 million tpa of ethylene. The next phase will involve a detailed design and engineering package for building the cracker on Pulau Bukom, for which construction is expected to start in 2006 and the plant is scheduled to be operational in H1 - 2009. The project will involve modifications and additions to the existing Bukom refinery owned by Shell Eastern Petroleum. It will also include building a new world-scale ethylene cracker on Bukom Island, and a new mono-ethylene-glycol or MEG plant on Jurong Island. Both the cracker and the MEG plant will benefit from integration with Shell's existing investments in Singapore. The investment outlay does not include other possible multi-million dollar investments in downstream chemical plants. However, Shell remains committed to its existing partnership with Sumitomo through Petrochemical Corporation of Singapore. PCS is a 50:50 joint venture between Shell Chemicals and a Japanese consortium led by Sumitomo Chemicals. PCS is expected to have a commercial relationship with the project that builds on the existing infrastructure of the Merbau complex on Jurong Island.