Singapore, April 12:

Land-scarce Singapore will build underground rock caverns in a man-made island off its southwestern coast to serve as a storage facility for the chemicals industry, a minister said today.

Trade Minister Lim Hng Kiang said work on the project will start later this year and the first caverns are expected to be ready by 2009. The rock caverns will be located underneath Jurong island, currently the site of Singapore’s chemical industry which covers petroleum, petrochemicals and specialty chemicals.

Lim said the underground caverns could be integrated with above-ground storage facilities in order to optimise the capacity of the island, a land mass formed from the amalgamation of several smaller islands. “This will result in land savings and offer benefits of enhanced safety and security. More importantly, it will help boost Singapore’s position as a leading chemicals hub.”

Lim was speaking at the opening of a fourth terminal of Dutch firm Royal Vopak, the worlds largest independent tank terminal operator specialising in the storage and handling of liquid and gaseous chemical and oil products.

Other companies on Jurong island include British Petroleum, ExxonMobil, DuPont, Mitsui Chemicals, Chevron Oronite, Shell and Sumitomo Chemical. Chemicals industry accounted for 31 per cent of Singapore’s total manufacturing output in 2005 and is the second biggest contributor to the industrial output after electronics.

“The fact that Singapore sits at the centre of the key oil trading routes between the Middle East and the growing Asian markets, coupled with our excellent connectivity and supporting infrastructure, makes us a natural location of choice for chemical supply chain management,” Lim added. Singapore, a tiny but affluent island-city of four million people, is one of the top three refining centres in the world and the third largest global oil trading hub, he said.