How did Singapore Become the Third-Largest Petroleum Refining
Country in the World Without One Drop of Petroleum?
Many people may don’t know that Singapore, which did not have a drop of crude petroleum, took only more than 20 years to develop into the world’s third-largest refining center, a global oil trading hub and an Asian oil product pricing center. The petroleum refining and petrochemical industry is the mainstay of Singapore's economy. In 2011, the output value of Singapore's petrochemical industry reached 77 billion US dollars, accounting for 34% of the country's GDP at that time.
The Jurong Island Industrial Zone is the world's third-largest petroleum refining center after Houston in the United States and Rotterdam in the Netherlands.
Offshore drilling platforms are divided into jack-up and semi-submersible types. Singapore is the world's largest manufacturer of jack-up petroleum drilling platforms, accounting for 70% of the global market share.
The petroleum industry chain includes three parts: mining, refining, and chemical materials. The petroleum refining in Singapore is the process of processing crude petroleum into gasoline, diesel and other oil products. The petroleum refining industry not only brings profits to Singapore, but also provides essential raw materials for Singapore's second largest manufacturing industry - the chemical industry.
As a major port, Singapore requires large quantities of fuel for ships and airplanes, and the refining industry reduces the cost of local fuel and ensures its supply.
The efficient operation of refineries requires close tripartite cooperation among refining, logistics and commercial services. Driven by the giant oil refining industry, Singapore's modern logistics industry and other tertiary industries have been rapidly upgraded, and the country's industrial structure has been optimized.
Despite the benefits of oil refining, it requires large tracts of land and huge investments. Back in the 1960s, when oil refining began, Singapore's “small land and poor” can be said to be all hard.
From zero oil base to today's oil refining power, how did Singapore become the third largest oil refining country?
1. The Strait of Malacca became a route to riches
Thirty percent of the world's seaborne trade and more than 25 percent of oil shipments pass through the Malacca Strait, where Singapore is located.
Located at the mouth of the Strait of Malacca, Singapore has become the most golden maritime gateway, connecting the oil-producing Persian Gulf region to the west and the oil-consuming East Asian countries such as Japan and China.
About 70 percent of Japan's oil imports from the Middle East pass through the Strait of Malacca and 80 per cent of China's. Demand for oil refining, from crude to refined products, is strong.
Therefore, Singapore makes full use of the Malacca Straits maritime oil channel hub geographical advantage, and timely seize the international industrial division of labor transfer opportunities.
2. Seizing opportunity: Lee Kuan Yew's petroleum industry layout
With the rise of post-war East Asia, such as Japan and Taiwan, Lee Kuan Yew, then Prime Minister of Singapore, was keenly aware of the large demand for oil products in East Asia, and realized that Singapore could make huge profits by processing crude oil.
(The rapid development of postwar Tokyo)
In the 1960s, Lee Kuan Yew decided that Singapore should vigorously develop the petrochemical industry.
The development of petrochemical industry needs great efforts to attract investment. At that time, multinational oil companies were looking for new bases with lower costs to transfer capital and technology. The Singapore government has introduced a number of preferential systems to attract these companies, such as Shell, BP and ExxonMobil.
Until now, the Singapore government is one of the few countries in the world that does not intervene in the oil industry, and develops freely according to the market mechanism.
(The Singapore International Financial Exchange is Asia's first energy futures market)
At the same time, it has also implemented a series of free trade measures, including preferential taxation and simplified government approval, to provide a better investment environment than its regional neighbors.
Even during the 1973 oil crisis, the Singapore government did not interfere with the export of crude oil reserves. This move won the trust of overseas oil giants, and soon all kinds of foreign oil companies entered, forming an industrial cluster.
3. Jurong Island: land reclamation to solve the petrochemical land
Singapore has a small land area. To develop the petrochemical industry land, the government began to reclaim land in 1995, and the seven islands merged into a large island, built a total area of 32 square kilometers, Jurong Island.
The project was completed in 2009, 20 years ahead of schedule, giving the petrochemical company top-notch hardware.
The processing capacity and complexity of Singapore's refineries lead the world, becoming one of two countries in the world with an average refinery size of more than 20 million tons/year, and the other country is the United States. China's total refining capacity is about 1 billion tons, but there are 180 refineries with an average refining scale of just over 5 million tons.
In order to save land, the first underground oil depot in Southeast Asia was also built. In Jurong Island 130 meters underground, there is such a "rich flow of oil" place.
Although the construction cost of the Jurong underground storage is 30% higher than the cost of reclamation, it has saved Singapore 60 hectares of land for more economically valuable activities.
Utilizing the right time, place and people, even if there is not enough land and resources, not a drop of oil in Singapore, it can still work hard to solve the problem in hardship, and become the world's third largest refining power.
From “Chemical Pingtou".
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