Singapore temporarily closes door to greenfield refineries

For the moment, Singapore does not want any greenfield refineries on Jurong Island. Despite intensifying competition from new hubs emerging in Asia and the Middle East, the world’s third biggest oil refining center has put a halt to the building of refineries in Jurong and has instead asked its existing players, such as Shell, PetroChina, ExxonMobil, and Chevron to upgrade or expand their facilities and produce higher-value petrochemicals, lubricants and fuels.
“It’s a survival issue for the Singapore industry,” said Fereidun Fesharaki, chairman of Facts Global Energy, referring to the emerging competition including from shale gas-fuelled U.S. petrochemical crackers.
Singapore’s Economic Development Board’s (EDB) Deputy Director of Energy & Chemicals, Eugene Leong, said that “EDB does not have the specific aim of attracting a greenfield refinery investment at the moment. With the strong refining base Singapore has built up operated by world class companies, efficiently run and well integrated with the chemicals sector the focus is on upgrading the complexity of these refineries to build on this strong foundation and remain globally competitive.”
Singapore’s refineries
Singapore plays host to some of the biggest refineries in the world as rated by Oil & Gas Journal. ExxonMobil’s 605,000 barrels per day (bpd) Chawan refinery is ranked 5th; and Shell’s 500,000 bpd Bukom facility is ranked 14th among the top 20 biggest refineries in the world.
But BP’s 2011 Statistical Review revealed that while other rival hubs are growing, refining capacity in Singapore has stagnated at 1.38 million bpd. In 2010, construction of new refineries in China increased its capacity to over 10 million bpd, while India’s refining capacity has reached 3.7 million bpd. The executive chairman of Dialog Group, Ngau Boon Keat, which is building a S$778 million (US$623.66 billion) oil storage terminal with Vopak in Malaysia said, “Singapore is not building refineries because it has limited land. Singapore’s Jurong (Island) is full. The only way it can grow is buying sand… It has gone downstream into producing petrochemical products.”
On the other hand, industry observers believe that Singapore’s temporary move away from greenfield projects in Jurong is due to concerns about the rising carbon emissions from the refineries, as well as the big influx of foreign workers needed to build a refinery. (June 13, 2012)