Jurong Aromatics signs US$10b deal with BP
29 January 08 The Business Times by Ronnie Lim
JURONG Aromatics Corporation (JAC) - which is building a US$2 billion petroch emicals plant on Jurong Island - has just signed a mega US$10 billion-plus feeds tock/end-product combination deal with oil major British Petroleum.
It co vers supplies of a 'large proportion of feedstock requirements' to JAC's aromatics plant which is slated to start operating in 2011. The feedstocks, some of which will be fro m the Middle East, will come from BP's global network. In addition, JAC will sup ply refined products to the oil major for consumption by BP's own plants as well as to key t hird parties worldwide. BP has an option to renew the 'multi-year' contract, JAC said yesterday.
JAC - led by two Asian entrepreneurs and a group of oil traders - first announced plans for its plant last October. A JAC spokesman told BT yester day that the consortium is 'finalising' the project financing and expects to sta rt construction proper in the first half of this year.
BP Singapore's Sup ply and Trading director, Michael Bennetts, said the deal with JAC 'supports our long-te rm growth strategy in this region.'
'This is a very significant piece of business and reinforces BP's commitment to the Singapore market and our position as a leading player within one of the world's largest energy hubs,' he added.
The oil major, despite pulling out of oil refining here some years back after selling it s stake in Singapore Refining Company, has nevertheless maintained a large oil t rading and marine fuels presence here.
JAC director Ewe Ee Foong said: 'It is a grea t accomplishment for JAC to be in an alliance with BP, which is one of our large st customers. In fact our feed supply has been fully locked up and our products are fully subscribed by strategic partners such as South Korea's SK Energy, Swiss-based Gl encore and many key international players.'
Both SK Energy and Glencore a re in the JAC consortium which also counts Kuwaiti investment group Noor Financi al Investment Company and Jiangsu Sanfangxiang Industrial Group, China's largest polyester pro ducer. JAC's main shareholder, with a 60 per cent stake, is Jurong Energy Corpor ation led by Vijay Goradia and M Y Ling.
Mr Ewe added: 'Despite the curre nt oil price volatility, JAC is well positioned to meet the huge demand from downstream manuf acturers catering to the rapidly growing consumer demand for such end-products.'
JAC's complex will produce about 1.5 million tonnes of petrochemicals, i ncluding 800,000 tonnes of paraxylene, 200,000 tonnes of orthoxylene and 450,000 tonnes o f benzene.
Additionally, the complex, which includes a US$400 million con densate splitter, will also produce about 2.5 million tonnes of petroleum produc ts like jet fuel and kerosene.