Shell Singapore Fully On-Line

photo : Hydrocarbons processing

Shell has announced that its integrated refinery and petrochemicals complex in Singapore is now fully on line.

Shell has long talked of highly efficient, integrated supersites being the company's blueprint for the future. The Singapore Site certainly ticks all the boxes with the following features

• Complex refinery with capability to process a wide range of crudes
• Flexible cracker using latest technology and with capability to process heavier raw materials from refinery
• World scale downstream plants with latest technologies
• Fully integrated site infrastructure
• Optimisation models to maximise margins depending on feedstock prices and availability

The site can process 500,000 bbl/day of crude and the cracker has a capacity of 800kT. All of the downstream plants are of large capacity.

According to the press release, the investment is Shell's largest ever in chemicals. As the blog noted back in November, at International eChem, we have long argued that the critical success factors for petrochemical operations are integration, size, technology, global reach and location. The SEPC complex scores top marks on all of these points.

Shell - Integration Key To Successful Growth

photo : Hydrocarbons Technology

Shell believes that integration is key to delivering what it calls the 'oil chemicals advantage' in its petrochemical facilities.

Downstream Today has reported a recent speech at the recent Petchem Arabia 09 in Abu Dhabi by Aslam Moola, Business Development Manager for Shell Chemicals. Mr Moola cites various examples of projects and existing installations that clearly demonstrate the benefits of integration.

Integration, together with strong project implementation and effective production and energy management, is increasing the competitiveness of plants such as SEPC on Jurong Island, Singapore as well as other integrated Shell complexes around the world, according to Mr Moola.

The Middle East is set to benefit fom this integration. This will be even further enhanced by the development of downstream manufacturing capabilities, such as the polymer parks in Abu Dhabi and the growth of domestic markets in the region.

At International eChem, we have long argued that the critical success factors for petrochemical operations are integration, size, technology, global reach and location. Clearly, all of these factors must be supported by a strong business strategy, together with highly effective delivery of that strategy.

Recent projects in the Middle East and Asia tick all of the boxes and will increasingly dominate supply in the years to come.

Friday News Round Up

Being Friday, I thought it would be a good time to give an update on some of the stories covered in earlier postings.

Naphthachimie has been bringing plants back on stream at the Lavéra Site, whilst Arkema has been forced to declare force majeure on all PVC production in France due to the shutdown of the Lavéra VCM unit.

Jurong, the Singapore Chemical Park celebrated the completion of its land reclamation project - many years ahead of schedule.

ExxonMobil shared the secrets of its success in reaching number 2 in the ICIS list of Top 100 Chemical companies. In an interview with Bloomberg, an EM spokesperson reiterated the company strategy of integration and optimisation throughout the entire value chain.

OPEC shared its view on economic recovery, stating their belief that it will be slow and gradual. The group left its world oil demand forecast for 2010 unchanged.

Chemical Parks Under Threat?

From the 1990s onwards, the divestment of assets by many large chemical producers led to the break up of the single company supersites such as Wilton (UK), Marl and Leverkusen (Germany).

In order to survive the new reality, the 'Chemical Park' or 'Chemical Cluster' concept was established, with a number of operators on a site, sharing common infrastructure as well as a range of shared services.

New purpose-built parks have also been established, such as Jurong Island in Singapore, with over 94 multinational firms now present.

The concept is undoubtedly a good one. In principle, costs should be lower, as infrastructure and services costs can be shared between many parties and many suppliers/consumers are on the same site, reducing logistics costs. Permit applications for new plants are more straightforward as chemical production activity is already present at the site. Finally, the environmental issues related to plant closure should be simplified, due to the on-going industrial activity at the site

My personal experience is that whilst the concept may indeed be a very good one, participating companies need to weigh up very carefully the pros and cons for their own situation. Issues such as competitiveness of services, cost of and quality of infrastructure, flexibility of choice are very important - otherwise you may end up paying for some things you don't need and find yourself facing sharply rising future costs if the infrastructure quality is poor.

Also, in these challenging times, it is very important to consider what happens if other participating companies leave the cluster. As an example, Wilton in the UK, has suffered a number of recent plant closure announcements, with Dow Chemical, Croda, Invista and Artenius all annoucing closures.

Such a situation can increase costs and risks for the companies left behind and can, in the worst case, bring into question the viability of the entire site, unless positive action is taken to address the issues.

In balance, my view is that chemical parks are a good thing. Provided that the chemical park's strategy is consistent to the individual company operating strategy and all issues and threats have been considered and addressed, the positives do outweigh the negatives.