Global energy giant Shell has announced plans to expand its investments in Asia by building new petrochemical units in Singapore, which would be added to the company's $3 billion complex on Jurong Island.
The new units are expected to allow Shell to ramp up production capacity in certain business segments, as predictions for the development of the petrochemicals market signal a tendency for increasing demand in a number of categories, especially consumer goods, such as detergents and shampoo, which are preferred over laundry powder and soap bars in major markets like China and India. Demand for alcohol ethoxylates, for example, is set to grow by six to seven percent on an annual basis over the next five years.
Shell did not reveal the value of the investment or the timeframe of project completion but specified that the units would be built over 35,000 square metres of land. The company will build an ethylene oxide facility with an initial capacity of 140,000 tonnes per year and two ethoxylation units with a total capacity of 140,000 tonnes per year. Associated facilities, including product tanks and a HPEO pipeline grid, will also be included in the investment project. At the same time, Shell will upgrade its polyols production facility located in the vicinity.
Singapore will continue to be part of Shell's long-term projects, company officials stated at a groundbreaking ceremony, which was also attended by Singapore's senior minister of state for trade and industry and national development, Lee Yi Shyan, executive vice president of Shell Chemicals, Graham van't Hoff, and chairman of Shell companies in Singapore, Lee Tzu Yang. The plans for expansion will still go ahead, despite cheap feedstock competition, the company added. Feedstock prices are crucial for petrochemicals production, as feedstock accounts for 90 percent of the entire production cost.
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According to van't Hoff, the total number of companies that supply HPEO and alcohol ethoxylates is very small and Shell is one of them. The major expansion that Shell is starting will allow it to boost production capacity and to meet increasing demand for the products from global consumers.
HPEO is derived from ethylene oxide and is widely used in a range of household and industrial products. The ethoxylation industry processes HPEO and alcohol into alcohol ethoxylates, which are major ingredients for a variety of consumer goods, including detergents, shampoo and body wash.
Shell will provide feedstock for the new HPEO from its ethylene oxide/mono-ethylene glycol plant on Jurong Island, integrated with the company's ethylene cracker through to its largest fully-owned refinery on Pulau Bukom. Lee Tzu Yang explained that HPEO and alcohol ethoxylates have major strategic importance for the Asian chemical industry. Shell's investments in the sector will guarantee that the company will support Singapore's economic growth and maintain its position as a global petrochemical hub, he added.
