Stolthaven Terminals has begun work on its giant $350 million chemical storage terminal in Jurong Island's Tembusu cluster.

The ground was broken yesterday on the project's first phase, which will give the bulk-liquid chemical terminalling specialist 61,000 cubic metres of storage capacity.

Expected to be fully operational by the third quarter next year, the facility will provide storage and transport services to chemical plants on the island, and employ up to 50 highly skilled operatives, such as technicians, operators and engineers.

Stolthaven plans to build a total storage capacity of 354,000 cubic metres in successive phases over the next two to three years.

The subsidiary of Stolt-Nielsen Group first announced its building plans in July 2008, with completion scheduled for this year.

But the project was put on hold due to a lack of customer commitment arising from the financial crisis.

The recommissioning of the project coincides with a turnaround in the chemical industry here.

Cumulative output of Singapore's chemical cluster, which accounts for one-third of manufacturing output here, rose 18.7 per cent during the first four months this year compared to the same period a year ago.

And last month, Shell opened its multi-billion-dollar petrochemical complex on Jurong Island, with Exxon Mobil set to follow suit early next year.

At yesterday's ground-breaking ceremony, JTC Corporation chief executive Manohar Khiatani said the two major projects were 'queen bees', which would spawn many downstream projects in the industry.

Just last month, chemical giant Lanxess broke ground for its new 400 million euros (S$680 million) synthetic rubber plant, also on Jurong Island, which is destined to get its raw materials from the Shell cracker.

Mr Khiatani said: 'A whole value chain is created, because these downstream projects will need utility and logistics services - and that's where people like Stolthaven come in.'

To date, it is understood that Stolthaven has secured one contract with Lanxess, which will involve the supply of specialised gas tanks and liquid tanks.

But contract discussions with other customers are ongoing, according to Stolt-Nielsen Asia-Pacific managing director Andrew Pickering.

‘Just by the initial interest of our customers, we're very encouraged that we're going to have the right revenues coming in,' he added.

‘Having a state-of-the-art storage terminal to integrate with our tanker and tank container assets in the strategic location of Singapore is a long-term vision come true.'

Mr Khiatani is confident that Stolthaven's logistics competitiveness will strengthen Jurong Island's leadership position in the chemical industry.

Already, Jurong Island is home to many leading logistics providers such as Vopak and Oiltanking, which support a community of more than 50 chemical manufacturers here.

Mr Khiatani said JTC's long-term goal was for output of the basic feedstock ethylene to be six to seven million tonnes per year.

'Right now, with the Shell Houdini project it's three million tonnes. When Exxon Mobil comes onstream, it will be four million tonnes,' he said.

Stolt-Nielsen Group currently employs 148 workers in Singapore, and 5,000 at 33 locations worldwide.

Source : The Straits Times © Singapore Press Holdings Ltd. Reprinted with permission.