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Jurong Port, Oiltanking launch venture for new petrochemical terminal
JURONG Port and Oiltanking commemorated the official launch of their joint venture, Jurong Port Tank Terminals (JPTT), on Wednesday.
The venture is for a new liquid bulk terminal that is expected to solidify Singapore's position as Asia's regional petrochemical hub.
Observers see Singapore widening its lead with the new terminal as the island nation fends off emerging contest for product flows from Malaysia's giant refinery complex coming up just across the Johor straits.
The commemoration comes just short of two years from the penning of an agreement between Jurong Port and Oiltanking in December 2015 to develop, own and operate the terminal. The terminal will be supported by four jetties capable of handling vessels of up to 180,000 deadweight tonnes. It will be connected via pipelines to Jurong Island.
Earlier this year, the joint venture partners awarded the construction work to Rotary Engineering and Antara Koh. The planned facilities will enter into operation in phases beginning from 2019.
JPTT's 480,000 cubic metres of storage capacity represents about half of recent additions to Singapore's overall capacity.
Low Yen Ling, Senior Parliamentary Secretary for Education and Trade & Industry, said at the commemoration that, in this respect, the terminal "provides valuable support to energy and commodity companies" considering "it is becoming increasingly challenging to create new storage space in land-scarce Singapore".
JPTT also represents an integral part of Jurong Port's transformation that started three years ago.
Jurong Port CEO Ooi Boon Hoe said that the new terminal was part of a strategic vision of becoming a world-class port operator through the development and expansion of the port's operating capabilities.
JPTT comes at a time when the petrochemical trade is booming as activity further upstream wanes with oil prices failing to break through the US$40-50 bracket following their collapse in 2014.
Afco Petrochemicals managing director Lim Fang Wei noted a "pronounced shift among oil producing countries or companies" to focus on downstream operations, which continue to draw support from demand growth for plastics and petrochemicals resulting from expanding economies especially in Asia.
On the other hand, this also poses competition to Singapore's Jurong Island in the form of progress ramping up on Rapid or Refinery and Petrochemical Integrated Development Project that is mooted by Malaysia's national oil company, Petronas.
Mr Lim noted that Rapid has the advantage of having Saudi Aramco on board as a key investor though it remains unclear whether this will translate to the oil giant moving physical cargoes through Malaysia. He qualified though that Singapore still holds a commanding position as a trading hub for petrochemicals and oil products.
Considering that Singapore took 20 to 30 years to establish the infrastructure in Jurong, Malaysia may take some time before catching up.
S&P Global Platts team leader Gustav Holmvik said that "adding infrastructure should always be a plus" for Singapore, though he warned against the higher cost here compared to neighbouring countries.
In this respect, Singapore may draw comfort from the promise of lower costs and improved operational efficiencies that can result from JPTT's close proximity to and its planned pipeline connection with the petroleum and petrochemical network on Jurong Island.
Jurong Island, as the anchor of Singapore's energy & chemicals industry, now houses over 100 companies and has attracted investments of more than S$50 billion. The industry accounts for about a fifth of Singapore's total manufacturing value added and about 25,000 jobs here.