Speech By DPM Lee Hsien Loong At The Dedication Ceremony For Exxonmobil Chemical's Singapore Chemical Plant 25 January 2002

Your Excellency, Frank Lavin, US Ambassador to Singapore Ladies and Gentlemen.

1. I am very happy to join you this morning for the dedication ceremony of ExxonMobil's Singapore Chemical Plant (SCP).

2. The petroleum and petrochemical industry in Singapore has come a long way. We started off with oil refining in the 1960s, and grew to become the world''s third largest oil refining centre by the early 1980s. But by then other countries had also started to enter the oil refining business, and we faced the prospects of increasingly stiff competition. So we started promoting petrochemical projects to diversify our industrial mix, and integrate our existing base of oil refineries with the growing downstream petrochemical business.

3. Our first petrochemical complex, completed on Pulau Ayer Merbau in 1984, quickly reached capacity. We therefore decided to embark on the ambitious project to build Jurong Island out of what were coral reefs and a scattering of small islands, and to develop an integrated petrochemical industry complex on the island. Our vision was to bring together a collection of upstream and downstream petrochemical plants that supply one another, create synergies for each other, and make viable the whole complex ecology of different operations and products, where a single plant could not survive.

4. We put in place the infrastructure to help bring this about. A common pipeline service corridor now links companies on the island to one another, supplying vital feedstock, products and utilities from one plant to another. Companies can sell their products over-the-fence, and save substantial costs in transporting feedstock. The service corridor also allows us to manage and transport utilities such as steam and cooling water centrally, to meet the needs of chemical companies on the island. The companies can thus reduce their initial capital outlay, lower operating costs through economies of scale, and concentrate on their core businesses.

5. But hard infrastructure alone is clearly not enough. Other countries are also developing their own petrochemical industries, lured by the large and growing market for petrochemical products. Singapore has therefore also focussed on the on the "soft" infrastructure of Jurong Island as well.

6. Post September 11, one key aspect of this "soft" infrastructure is the security of investments on Jurong Island. We are aware of the concerns of our investors. JTC Corporation has therefore introduced stringent and thorough checks on vehicles and people coming to Jurong Island. A task force has also been set up to look into longer term measures for the security of the Island, bearing in mind the need to strike a balance between safety and efficiency. We will continue to monitor the situation, and will not spare any effort to ensure the security and safety of Jurong Island and all who work here.

7. Another aspect of "soft" infrastructure is the presence of secondary activities such as training and R&D in related fields, which directly support the growth and development of the primary businesses on the Island. Construction of the Chemical Process Technology Centre (CPTC), for example, commenced last year. When completed, it will have the capacity to train 800 students and 8,000 workers in-employment annually for both the chemical and pharmaceutical industries. The CPTC will work closely with the companies to ensure that it turns out quality technicians able to operate state-of-the-art technologies in the plants on the island. In addition, a new Institute of Chemical Sciences (ICS) will be set up on Jurong Island. The ICS will focus on R&D in chemical and process engineering that is critical for the continued growth and development of the petrochemical industry in Singapore.

8. ExxonMobil has been a key player throughout these developments. Mobil set up its oil refinery in Pulau Pesek in 1965, the second in Singapore after Shell's facility was opened in Pulau Bukom. Exxon Corporation followed with a refinery on Pulau Ayer Chawan in 1969. Over the years, both companies have continued to expand their activities in Singapore, including setting up lubes, lube base oil and fuel additives plants and aromatics complexes amounting to over S$7 billion in investments.

9. Today, ExxonMobil is dedicating its new S$3.5 billion Singapore Chemical Plant. It is a significant project, making ExxonMobil the single largest investor on Jurong Island and Singapore's biggest foreign investor. With the SCP, ExxonMobil will be the first company to integrate upstream petroleum refining and downstream chemicals manufacturing on Jurong Island. This will allow the company to take feedstock directly from its two Singapore refineries.

10. ExxonMobil decided to embark on the SCP in December 1998, when the region was in turmoil because of the Asian financial crisis, and the economic outlook was highly uncertain. It was a bold step, reflecting the company's recognition of the tremendous growth potential in the Asia-Pacific region. More significantly, the decision reflects the company's confidence in Singapore's continued ability to provide a stable, conducive business environment with many opportunities for expansion.

11. Singapore is very happy to have enjoyed many years of fruitful partnership with ExxonMobil. We look forward to more investments and deeper collaboration with you in the years ahead. On our part, Singapore will continue to strive to provide the best conditions for our investors. Just as ExxonMobil continues to create and extract value from its projects, as exemplified by the addition of the SCP, Singa-pore will work to enable our partner companies to maximise their potential on Jurong Island.

12. I wish the Singapore Chemical Plant and ExxonMobil's operations every success.