Singapore refiners switch output products<\/p>\n
SINGAPORE (AFP): A shortage of land and changing demand are
\nforcing Singapore oil refiners to switch output to higher value-
\nadded products instead of expanding primary production, industry
\nofficials said yesterday.<\/p>\n
They said a new preference for lighter or cleaner petroleum
\nproducts also reflected rising Asian demand for products such as
\ngasoil and jet fuel.<\/p>\n
Industry sources said constraints on land supply would be felt
\nby the end of the decade but was unlikely to cap growth of
\nSingapore's refining industry, the third largest after Rotterdam
\nin the Netherlands and Houston in the United States.<\/p>\n
"There is no more room on Merlimau (island) for expansion. The
\ngovernment is reclaiming land but more land is not the only
\nsolution," said Jacobus Rinck, managing director of Singapore
\nRefining Co. (SRC).<\/p>\n
SRC, a joint venture between Singapore Petroleum Co., British
\nPetroleum and the United States' Caltex Petroleum Corp., has its
\nrefinery on Merlimau island.<\/p>\n
Industry officials say oil refineries have not been static
\nwhile waiting for the government to reclaim land.<\/p>\n
"I don't expect any of us to be static for more than a few
\nyears. The direction is to further upgrade and get more
\nsophisticated and value-added products and lean more towards
\npetrochemicals," Rinck said.<\/p>\n
A spokesman for Anglo-Dutch oil major Shell said that while
\nland could be made available through reclamation, it would be at
\nincreasingly higher costs.<\/p>\n
"The decision whether to expand the capacity any further will
\ntherefore be one of economics," he said, adding that "upgrading
\n(units) or secondary facilities in general will give a higher and
\nmore steady return than primary facilities."<\/p>\n
"I do not think we can say that land availability will place a
\ncap on the growth of the oil industry," the Shell spokesman said.<\/p>\n
Petroleum Intelligence Weekly, a trade publication, said in a
\nrecent report that Singapore's crude distillation potential stood
\nat 1.15 million barrels per day (bpd), with 300,000 bpd added in
\nthe last six years.<\/p>\n
The capacity for secondary facilities, such as
\ndesulphurisation units, is less than 310,000 bpd, while that for
\nupgrading units to produce light products is around 330,000 bpd.<\/p>\n
The report said only SRC had announced plans to expand base
\ncapacity in the near future while British Petroleum was not only
\nunlikely to hold off growth but might dismantle its 30,000 bpd
\nplant when its land lease expires in 1999.<\/p>\n
Mobil, Shell and Esso have not revealed plans but are cramped
\nand unlikely to add much more to existing capacity, the report
\nsaid.<\/p>\n
While refiners lack the space to expand distillation capacity,
\nthey are upgrading facilities to produce lighter products which
\nare most needed.<\/p>\n
The Petroleum Intelligence Weekly report said a new wave of
\ninvestment in secondary facilities was likely to push Singapore's
\nsecondary-primary capacity ratio to 35 percent by 1996 from less
\nthan 30 percent now.<\/p>\n
Shell, Mobil, Esso and SRC have announced construction of
\nunits worth more than US$1.8 billion to produce lighter products
\nas well as to reduce the sulphur content in gasoil.<\/p>\n
Projects to expand light products output by 1996 include SRC's
\n33,000 bpd residual catalytic cracker and the combined reforming
\ncapacity of Esso, Mobil and Shell totalling 100,000 bpd.<\/p>",
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