The Singapore government is expected to decide whether to build a dedicated liquefied petroleum gas (LPG) terminal in the city-state by the middle of 2011 as part of a plan to boost the competitiveness of its petrochemicals industry, a senior official said on Monday.

The terminal, to be situated on offshore Jurong Island, will allow companies to import greater quantities of LPG, which is used as a feedstock in the production of chemicals.

 

“We have engaged consultants to study the possibility of setting up an LPG terminal on Jurong Island. We should be able to make a decision by early to middle of next year,” Liang Ting Wee, the director of energy and chemicals at Singapore's Economic Development Board, said in an interview.

 

The government agency has received positive feedback on the proposed terminal from industry players, he said.

 

“We have held a round of industry consultations and they have welcomed the intitative,” he said.

 

The terminal could take up to two years to build after being given the greenlight, Liang said, without giving details on the possible cost or capacity.

    

The LPG proposal is part of the government’s blueprint for the next phase of Jurong Island, which houses some 90 companies in the energy and chemicals industries.

 

One key strategy of Jurong Island 2.0, as the plan is called, is to boost access to competitive feedstock.

 

“Feedstock competitiveness is a key success factor in any chemicals industry,” said Liang.

 

The first step in this plan calls for the integration of oil refineries and petrochemical plants on Jurong Island to make better use of feedstock.

 

In May, Shell unveiled two new units and a revamp of its existing ones at its Singapore refinery to widen feedstock choices for its new 800,000 tonne-per-year (tpy) cracker.

 

Exxon’s second cracker, which is expected to come online in 2011, will also see it integrate better with its refinery.  Another plank of the strategy is to provide chemical players on Jurong Island access to new sources of raw materials, such as LPG and bio-based feedstock.

 

“We are looking at technologies that will allow bio-renewables to be used in products that have traditionally used fossil-based fuels,” said Liang.

 

“Geographically, we are close to these bio raw materials, and coupled with strong logistical links, it makes this an important area that we will explore,” he added.

 

The move towards bio-renewables globally is being fuelled by a greater demand among consumers for environmentally friendly products with a lower carbon footprint.

 

Bio-based raw materials are now a more expensive option than fossil fuel, but technology advances could change that, Liang said.

 

“It is an important area and we can expect to see greater adoption as we go along, but it will not significantly replace fossil fuel," he added.