Sumitomo and Shell Look at Building an Ethylene Plant in Singapore

Sumitomo Chemical and Shell Chemicals have just signed a letter of intent to carry out a joint feasibility study with the aim of building a new ethylene plant in Singapore.

At the same time, Sumitomo will embark on its own study regarding the manufacture of polyolefins using the ethylene and propylene produced from the proposed plant.

Sumitomo intends to use the new plant to sure up its position in the rapidly growing Asian petrochemicals market which is experiencing competition from the US, Europe and the Middle East.

Singapore has been chosen for the location of the new plant as Sumitomo already has two joint venture operations there which the new facility can leverage off, both of which have experienced rapid sustained growth since 1993. In addition to this, the existing plants can provide infrastructure, sales and logistics channels as well as knowledge and experience. Meanwhile, Singapore can offer the lowest logistics cost in Asia, a skilled workforce and political stability.

The intended plant is to be located on Bukom Island. Shell, Sumitomo’s joint venture partner in the existing two Singaporean operations, already has a oil refinery there, with which the plant can be integrated into.

If the plant goes ahead, it will further enhance the co-operation between the two companies. The plant itself will have a capacity of 1,000,000 tons per year and is scheduled to begin production in 2007.

For more information on ethylene related materials, click here.

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