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  Business Times Times 29 Oct 07
Shell to build 4.5 km pipeline under sea
It will use facility to transport butadiene from Bukom plant to Jurong Island
By Ronnie Lim

SHELL, which is developing a US$3 billion-plus petrochemical cracker on Pulau Bukom, is building a 4.5-km submarine pipeline to transport butadiene, one of the new cracker's products, to Jurong Island.

While the pipeline is dedicated to butadiene, there is the possibility that Shell could also build in some spare capacity to enable it to transport other petrochemicals to customers on Jurong Island, given its land constraints on Bukom.

Dutch terminal operator Vopak, with whom Shell has just signed a long-term butadiene storage contract, will itself invest tens of millions to build new tankage for this.

'We are discussing with Shell the possibility of storing other petrochemicals for the company,' a Vopak official told BT.

This raises the prospect of Shell using the submarine pipeline to transport other petrochemicals from its new Bukom cracker, which is starting up in 2009/2010, to Jurong Island where many downstream chemical plants are sited.

The butadiene, used to produce polymers and chemical intermediates for end-products like synthetic rubber, will come from a 155,000 tonnes-per-annum butadiene extraction plant which Shell in April said it was adding to its US$3 billion cracker complex.

Shell, which at that time declined to disclose its investment in the butadiene plant, said the unit will also produce a by-product, raffinate-1.

The oil giant, which will undertake construction of the undersea pipeline from Bukom to Seraya, on Jurong Island, declined to say how much it will cost, although this is likely to run into millions of dollars.

From Seraya, Vopak will build a seven-km service line to its Banyan terminal, where it will construct 7,500 cubic metres of new tankage to store and handle the butadiene.

Vopak said that the storage facility will allow for butadiene to be supplied as feedstocks to Shell's future customers on Jurong Island. The butadiene may also be exported via Vopak's jetties for distribution by Shell to regional markets.

The butadiene storage facility will be operational in 4Q 2009 in time for the start up of Shell's butadiene plant.

Pieter Eijsberg, general manager of Shell Eastern Petrochemicals Complex, said: 'This contract is an integral part of our SEPC project and will help us to meet the demands of the region's fast-growing petrochemical industry.'

Paul Govaart, managing director of Vopak Terminals Singapore, said that the project underlines the terminal operator's commitment to grow with, and in anticipation of, the chemicals and petroleum industry here.

'With our firm planned investment in the coming years, Vopak's total storage capacity in Singapore will be at 2.25 million cu m for oil storage and 765,000 cu m for chemicals by 2009,' he added.

Vopak, which is one of the biggest independent tankfarm operators in Singapore, is among those short-listed to operate and manage the $700 million Jurong Rock Cavern, or underground oil storage, which JTC Corp is building on Jurong Island.

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