Shell to raise Singapore EO capacity after joint-venture buy-out

12 November 2010 11:39  [Source: ICIS news]

SINGAPORE (ICIS)--Shell Chemicals is expected to ramp up its high-purity ethylene oxide (EO) capacity in Singapore after the recent buy-out of its joint-venture firm, Ethylene Glycols Singapore (EGS), a company source said on Friday.

On 11 November, Shell Chemicals signed a deal with its Japanese partners to buy out their 30% stake in the joint venture, the source said.

The move was to synergise Ethylene Glycols Singapore's 120,000 tonne/year EO unit and its nearby 750,000 tonne/year monoethylene glycol (MEG) plant on Singapore's Jurong Island, according to the source.

“All possible areas of synergy between the two MEG sites will be implemented. This will mean looking at integrating the hydrocarbons to sharing resources for the best synergy,” the source said in an email.

Ethylene Glycols Singapore was a 70:30 joint venture between Shell and a partnership of Japanese interests, which was led by Mitsubishi Chemical, according to Shell’s website.

The capacity of Ethylene Glycols Singapore's 60,000 tonne/year high-purity EO unit could to be increased to around 100,000 tonnes/year once it is integrated with Shell’s MEG plant, the source said.

“With expansion, the capacity of a plant of this scale could go up by approximately 60%,” added the source.

The company’s acquisition was a step towards establishing a worldscale, high-purity EO production site in Singapore, according to Iain Lo, Shell Chemicals' vice president for new business development and ventures, who was quoted in local newspaper The Business Times.

A new high-purity EO plant in Singapore was the next logical step for Shell Chemicals, as it could tap its raw materials from the recently completed Shell Eastern Petrochemical Complex (SEPC), Lo was quoted as saying in the newspaper.

Shell Eastern is able to produce 800,000 tonnes/year of ethylene, which is a feedstock of high-purity EO.

In May, Shell said the company was already in the advanced stage of planning for a high-purity EO facility, which would be built at Jurong Island, the city-state’s petrochemicals hub.

“We understand that there is high interest in the market for high-purity EO. As a leader in EO technologies, we hope to play a significant role in this high-purity EO value chain,” said the source.

High-purity EO is used in the production of detergents and soaps through the process of ethoxylation, in which EO is mixed with alcohols.

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By: Nurluqman Suratman

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