This was reported in Singapore Business Times.
Singapore, 31 January 2011 - Defunct first-generation biodiesel plants - which became uneconomical when palm oil prices soared - are being revived as new owners upgrade them to make other products like chemicals used for oil and gas drilling.
The plant’s upgrading and expansion, scheduled for completion in February 2012, will enable Stepan to produce surfactants used in oilfields. Stepan’s surfactants are used in three major oilfield market segments, including drilling, production and stimulation. Methyl esters are for instance used as solvents in drilling fluids.
Another Jurong Island's first generation biodiesel plant which looks set to go the same route is the S$130 million Jurong Island plant (once touted as the world’s largest biodiesel facility) of Australian-owned Natural Fuel Pte Ltd. The plant which folded up in late-2009 is understood to have changed hands recently. But no details are available at this time.
President and chief executive officer of Stepan, F Quinn Stepan Jr said at the time of its acquisition of Peter Cremer that: ‘Methyl esters are a core building block of Stepan’s surfactant business and the acquisition of this asset on Singapore’s Jurong Island provides a great opportunity to reach our global customer base with methyl esters and value added derivatives.’
‘Our plan is to install methyl ester fractionation capability on the site in order to supply our customers and our internal surfactant needs globally with fractionated methyl esters and derivatives made from tropical oils available in the region.’
The financial terms of the acquisition of the US$20 million plant - previously a joint venture involving Germany’s Peter Kremer and Malaysia’s Kulim Berhad - were not disclosed.
Stepan just over a week ago awarded a S$14.6 million contract to Rotary Engineering to build a new four-storey 50,000 tonnes per annum (expandable to 100,000 tonnes per annum) fractionated methyl ester plant and also upgrade the existing plant. The plant is expected to tap raw materials like palm oil and coconut from this region.
The early first generation plants here like Natural Fuel and Peter Cremer, and a third plant belonging to Continental BioEnergy, essentially fell victim to soaring palm oil prices. Palm oil prices had tripled to US$1,400- plus a tonne by March 2008 from US$450 a tonne around 2005/06 when the Jurong Island plants first started.
Given also stiff competition from the many rival biodiesel plants in neighbouring palm oil producing countries, Malaysia and Indonesia, Singapore has been promoting more advanced second generation plants, with biofuels developed from non-edible or discarded plant parts.
Finland’s Neste Oil which expects to ramp up its just-started S$1.2 billion biodiesel plant at Tuas to full production by mid-year, exemplifies such second generation technology.
Its 800,000 tpa Singapore plant - the largest in the world, with an identical new twin plant in Rotterdam starting up also around mid-year - produces biodiesel from 100 per cent renewable materials like palm oil and animal fat. Its advanced second generation refineries allow Neste Oil to produce biodiesel from straight processing of the raw materials.
The Economic Development Board, in a background note to a recent tender for a consultant, said: ‘EDB believes bio-based feedstocks could add a new dimension of chemical feedstock option on Jurong Island. The fast-growing bio-based chemicals industry would also create new economic opportunities for Singapore.’