Royal Dutch Shell said it had awarded a design and engineering contract for a new ethylene cracker in Singapore to ABB-TEC JV, moving the project from the planning stage towards construction.

Shell said the facility was expected to begin operations in 2009. The cracker will be built by a joint-venture between Swiss-based ABB Lummus Global and Japan’s Toyo Engineering Corporation, following a final investment decision expected in 2006.
“In line with Shell’s overall strategy of more upstream and profitable downstream, the integrated refining and petrochemicals complex will contribute to Shell’s downstream business,” the company said.
Shell has said previously that it was considering a naphtha cracking facility with a capacity of 600,000-900,000 tonnes per year (tpy).
The plant, which may have a possible price tag of $1 billion, will use light oil product naphtha to make petrochemical building blocks to meet growing regional demand. Singapore’s Economic Development Board will collaborate with Shell to build the cracker.
Singapore aims to become a regional petrochemicals hub.
But the Middle East continues to attract the bulk of investment flows due to access to cheap feedstock such as ethane, also used to make ethylene, while China’s large manufacturing base has also attracted petrochemical investments.