Singapore : Jurong Island ( Developing an Integrated, World Class Petroleum & Petrochemical Hub

[ Source : Economic Development Board ]

Introduction
In 1993, the Government of Singapore launched a Manufacturing 2000 (M2000) programme aimed at sustaining the manufacturing sector's share of the country's Gross Domestic Product (GDP) at more than 25%. Singapore's GDP in 1996 was S$132.6 billion. The chemical industry cluster is the second largest in terms of manufacturing output, contributing 18 % of the total manufacturing output of S$120 billion in 1996. It is one of the key sectors in the M2000 programme. The Economic Development Board (EDB) is the lead agency for developing the manufacturing sector in Singapore. Its strategic intent for the chemical industry cluster is to develop Singapore into an integrated world-scale petroleum and petrochemical hub. Under the M2000 programme, Singapore has adopted a cluster development strategy to improve competitiveness through the establishment of linkages and integration, within a cluster, as well as between industry clusters. Figure 1 : The Chemical Cluster Singapore is the third largest refining centre in the world. Its total refining capacity is 1.2 million barrels per day. The development of the petrochemical industry in Singapore is a natural progression given Singapore's strong base in petroleum refining which provides feedstocks such as naphtha for the petrochemical industry. The petroleum, petrochemical and chemical industries are experiencing rapid growth in Asia. To capitalise on this growth, Singapore aims to create a competitive environment on Jurong Island to house these industries.

Introduction

In 1993, the Government of Singapore launched a Manufacturing 2000 (M2000) programme aimed at sustaining the manufacturing sector's share of the country's Gross Domestic Product (GDP) at more than 25%. Singapore's GDP in 1996 was S$132.6 billion. The chemical industry cluster is the second largest in terms of manufacturing output, contributing 18 % of the total manufacturing output of S$120 billion in 1996. It is one of the key sectors in the M2000 programme.

The Economic Development Board (EDB) is the lead agency for developing the manufacturing sector in Singapore. Its strategic intent for the chemical industry cluster is to develop Singapore into an integrated world-scale petroleum and petrochemical hub. Under the M2000 programme, Singapore has adopted a cluster development strategy to improve competitiveness through the establishment of linkages and integration, within a cluster, as well as between industry clusters.

Figure 1 : The Chemical Cluster

Singapore is the third largest refining centre in the world. Its total refining capacity is 1.2 million barrels per day. The development of the petrochemical industry in Singapore is a natural progression given Singapore's strong base in petroleum refining which provides feedstocks such as naphtha for the petrochemical industry.

The petroleum, petrochemical and chemical industries are experiencing rapid growth in Asia. To capitalise on this growth, Singapore aims to create a competitive environment on Jurong Island to house these industries.

Jurong Island
The Jurong Island amalgamation project is one of the key initiatives under the M2000 programme to develop a world-class chemical industry cluster. The Jurong Island project is implemented based on a total approach to industry development. The objective is to reduce capital investments and minimise operational costs through creating synergistic linkages, one of which is the concept of sharing facilities. For instance, feedstock transportation and handling cost could be minimised and economies of scale generated through the provision of centralised logistics and common corridors for materials flow. Figure 2 : Aerial Views of the Group of Seven Southern Islands (1996) The Jurong Island project will amalgamate a group of seven small islands off the southwestern coast of Singapore into a single island. The island would house the petroleum and petrochemical industries by reclaiming the channels between them and extending into additional sea space. The seven southern islands are Pulau Merlimau, Pulau Ayer Chawan, Pulau Ayer Merbau, Pulau Seraya, Pulau Sakra, Pulau Pesek and Pulau Pesek Kecil. With an existing land area totaling a little less than 1,000 hectares, the intention is to create an additional 1,790 hectares of land through reclamation. This will form a land mass of about 2,790 hectares which will be available for industries. Figure 3 : Location of Jurong Island In the 1960s, this group of seven small islands had been identified as the ideal location for heavy industries. It became home to several large oil refineries including Esso, Mobil and Singapore Refining Company (a joint venture between Caltex, BP and Singapore Petroleum Company), located on Pulau Ayer Chawan, Pulau Pesek and Pulau Merlimau respectively. In 1984, the first petrochemical complex in Singapore was established on Pulau Ayer Merbau. The cracker in this complex is operated by Petrochemical Corporation of Singapore, a joint venture between Shell and a Japanese consortium led by Sumitomo Chemical. The downstream players in the complex include The Polyolefin Company, Phillips Petroleum, Ethylene Glycols Singapore, Denka, and Kureha Chemicals. With these pioneers in place, it became logical that the surrounding islands, when amalgamated, would be suitable for the development of a petroleum and petrochemical hub. The physical clustering of related chemical industries provides strong opportunities for industry integration and other benefits arising from economies of scale. In 1991, the government approved the amalgamation plan at an estimated total direct development cost of S$7 billion. This was a direct response to the identification of the chemical industry as a key growth sector, contributing significantly to the Singapore economy. The idea was to reclaim the land in phases to keep pace and to meet the projected demand of the industry. The original schedule for the final phase of the reclamation was year 2030. However, with increasing demand from these industries over the past two years, the reclamation has progressed ahead of schedule. The completion of Jurong Island is now targeted for the year 2003. The current reclamation schedule is shown in Figure 4. Figure 4 : Jurong Island - areas to be reclaimed and proposed reclamation schedule

Jurong Island

The Jurong Island amalgamation project is one of the key initiatives under the M2000 programme to develop a world-class chemical industry cluster. The Jurong Island project is implemented based on a total approach to industry development. The objective is to reduce capital investments and minimise operational costs through creating synergistic linkages, one of which is the concept of sharing facilities. For instance, feedstock transportation and handling cost could be minimised and economies of scale generated through the provision of centralised logistics and common corridors for materials flow.

Figure 2 : Aerial Views of the Group of Seven Southern Islands (1996)

The Jurong Island project will amalgamate a group of seven small islands off the southwestern coast of Singapore into a single island. The island would house the petroleum and petrochemical industries by reclaiming the channels between them and extending into additional sea space. The seven southern islands are Pulau Merlimau, Pulau Ayer Chawan, Pulau Ayer Merbau, Pulau Seraya, Pulau Sakra, Pulau Pesek and Pulau Pesek Kecil. With an existing land area totaling a little less than 1,000 hectares, the intention is to create an additional 1,790 hectares of land through reclamation. This will form a land mass of about 2,790 hectares which will be available for industries.

Figure 3 : Location of Jurong Island

In the 1960s, this group of seven small islands had been identified as the ideal location for heavy industries. It became home to several large oil refineries including Esso, Mobil and Singapore Refining Company (a joint venture between Caltex, BP and Singapore Petroleum Company), located on Pulau Ayer Chawan, Pulau Pesek and Pulau Merlimau respectively. In 1984, the first petrochemical complex in Singapore was established on Pulau Ayer Merbau. The cracker in this complex is operated by Petrochemical Corporation of Singapore, a joint venture between Shell and a Japanese consortium led by Sumitomo Chemical. The downstream players in the complex include The Polyolefin Company, Phillips Petroleum, Ethylene Glycols Singapore, Denka, and Kureha Chemicals.

With these pioneers in place, it became logical that the surrounding islands, when amalgamated, would be suitable for the development of a petroleum and petrochemical hub. The physical clustering of related chemical industries provides strong opportunities for industry integration and other benefits arising from economies of scale.

In 1991, the government approved the amalgamation plan at an estimated total direct development cost of S$7 billion. This was a direct response to the identification of the chemical industry as a key growth sector, contributing significantly to the Singapore economy. The idea was to reclaim the land in phases to keep pace and to meet the projected demand of the industry. The original schedule for the final phase of the reclamation was year 2030. However, with increasing demand from these industries over the past two years, the reclamation has progressed ahead of schedule. The completion of Jurong Island is now targeted for the year 2003. The current reclamation schedule is shown in Figure 4.

Figure 4 : Jurong Island - areas to be reclaimed and proposed reclamation schedule

Sharing of Facilities
Central to the industry cluster concept and development of Jurong Island as an integrated complex is the sharing of common facilities. These include marine facilities, such as jetties and other berthing facilities; services such as warehousing, waste treatment, fire fighting, medical and emergency response; a common service corridor and infrastructure such as roads and drains. The advantages of economies of scale and optimal land utilisation make the provision of common facilities an attractive proposition to many industrialists. The idea is to create a self-contained complex within which all necessary industrial infrastructure and supporting facilities are provided. Singapore is well positioned to play a key role in the growth of Asia-Pacific's petrochemical industry with an integrated hub on Jurong Island. Many multinational companies are already enjoying the benefits of locating on Jurong Island. Companies that have recently announced their intention to locate on Jurong Island include a Sumitomo led consortium (acrylics complex), Eastman Chemical (oxo-alcohols), Chevron (lube additives), Asahi (polyacetal resins), Poval Asia (polyvinyl alcohol), Denka (acetylene black, polystyrene) and Lonza (purified isophthalic acid).

Sharing of Facilities

Central to the industry cluster concept and development of Jurong Island as an integrated complex is the sharing of common facilities. These include marine facilities, such as jetties and other berthing facilities; services such as warehousing, waste treatment, fire fighting, medical and emergency response; a common service corridor and infrastructure such as roads and drains. The advantages of economies of scale and optimal land utilisation make the provision of common facilities an attractive proposition to many industrialists. The idea is to create a self-contained complex within which all necessary industrial infrastructure and supporting facilities are provided.

Singapore is well positioned to play a key role in the growth of Asia-Pacific's petrochemical industry with an integrated hub on Jurong Island. Many multinational companies are already enjoying the benefits of locating on Jurong Island. Companies that have recently announced their intention to locate on Jurong Island include a Sumitomo led consortium (acrylics complex), Eastman Chemical (oxo-alcohols), Chevron (lube additives), Asahi (polyacetal resins), Poval Asia (polyvinyl alcohol), Denka (acetylene black, polystyrene) and Lonza (purified isophthalic acid).