TRANSCRIPT OF SPEECH BY PRIME MINISTER LEE HSIEN LOONG AT THE OPENING OF EXXONMOBIL’S CHEMICAL PLANT EXPANSION ON 8 JANUARY 2014, 11.30AM, AT JURONG ISLAND

Mr Rex Tillerson
Chairman and CEO of ExxonMobil Corporation

Mr Steve Pryor
President of ExxonMobil Chemical Company

Mr Matthew Aguiar
Chairman and Managing Director, ExxonMobil Asia Pacific Pte Ltd

Distinguished guests, ladies and gentlemen

EXXONMOBIL’S EXPANDED SINGAPORE CHEMICAL PLANT

I am very happy to be back here at ExxonMobil’s site in Singapore to witness your expansion and opening of your Singapore Chemical Plant. It is your largest investment in Singapore, and Singapore’s largest manufacturing investment ever. This expanded plant is the first facility in Asia-Pacific to produce specialty elastomers and metallocene-based polyethylene. It doubles the capacity of finished products in Singapore. It increases ExxonMobil’s chemical plant workforce by 50 percent, bringing the total employment at your integrated refining and chemical complex to 2,000. And it transforms the Singapore Chemical Plant into ExxonMobil’s largest integrated refining and petrochemical facility in the world. It is completed on time, I think within budget, and most importantly, also with a good safety record. Congratulations to ExxonMobil.

This latest milestone is part of a long partnership between ExxonMobil and Singapore. It goes back 120 years, when ExxonMobil’s predecessor was then the Vacuum Oil Company, and it was selling kerosene and lubricants in Singapore. After we became independent, ExxonMobil opened its refinery here, in 1966. Its refining output since then has doubled every decade, and over the almost 50 years, it has increased more than 30 times to almost 600,000 barrels per day. Back in 1998, during the Asian Financial Crisis, ExxonMobil decided to embark on its Singapore Chemical Plant, which I opened in 2002. Soon after opening the plant, ExxonMobil started thinking about expanding it. Today is the end of a long process – the plant opened in 2002; you thought about expanding it; with detailed studies, finally groundbreaking ceremony in 2007; and today, 2014, the expanded plant is up and running. So it is with a great sense of personal satisfaction that I am back in the same place with new capabilities here. Well done!

A THRIVING ENERGY AND CHEMICALS INDUSTRY

Thanks to partners like ExxonMobil, Singapore has built a thriving energy and petrochemicals industry, which is remarkable considering we have no energy sources of our own nor large land areas nor any other natural advantages. But we succeeded, because we have been able to maintain a stable political environment where such long-term capital-intensive investments are safe and can pay off, and we have created an integrated, efficient, pro-business environment with transparent regulations, an environment which is open to talent, which is connected to the world. And therefore, we have attracted investments here and ensured that they can succeed.

For example, this Jurong Island, where we now are. We built this Jurong Island. It used to be a collection of little islands and atolls and coral reefs. We put them together, built Jurong Island and so enabled us to overcome our constraints and forge a leading position in the industry. Today we supply a third of South East Asia’s total fuel needs, and we are one of a few countries capable of producing low sulphur automotive and bunker fuels. Many petrochemical companies have set up here – besides ExxonMobil, also BASF, Mitsui Chemicals, Shell, Sumitomo Chemicals. All your major competitors are here.

But it is healthy competition and Singapore has benefitted greatly from this. Energy and chemicals contribute a third of our manufacturing output, with many positive spillover effects, into the services sector, into logistics, into innovation and enterprise. And the jobs in petrochemical are the highest paid within the manufacturing sector. Many Singaporeans have built successful careers in this industry, here and overseas.

MAINTAINING SINGAPORE’S LEAD

We will continue to support the energy and chemicals industry. It is an industry with a bright future, because Asia’s continued growth will fuel demand for chemical products, whether it is for fuel, whether it is for skin care, whether it is for other consumer products. But at the same time, we do see challenges ahead for our petrochemical industry. There will be growing competition from other petrochemical centres in the US, in China, in Europe. There is increasing global concern over carbon emissions. We also have domestic constraints. For example, we are having to slow down the inflow of foreign workers; land is scarce and getting more expensive.

But we have several strategies to deal with this and to maintain our leading position in the industry. First of all, we are upgrading Jurong Island. It is today 14 years old. Over time, we have upgraded it and expanded it as our economy and industry have grown. Now we are taking a bigger step to make Jurong Island more competitive and sustainable, for example, introducing alternative feedstock sources such as LPG to increase competitiveness and reduce the cost of the plants here; using waste heat for water desalination to save energy, and therefore enhance our attractiveness to new investments like this chemical plant. We call this “Jurong Island Version 2.0”.

Secondly, beyond improving our hardware, we are also upgrading our software, in other words, our capabilities. A skilled workforce is a key part of this. We are growing our pipeline of science and engineering graduates. For example, the Singapore Institute of Technology has produced its first cohort of 69 chemical engineering students. In fact, they graduated in November last year. We are also promoting continuous education and training. For example, the Chemical Process Technology Centre (CPTC) works closely with companies to upgrade their technicians’ skills. And we are creating knowledge, through R&D. A*STAR has an Institute of Chemical and Engineering Sciences, and it has enhanced its R&D in chemical and process engineering. We will continue to encourage the industry to set up research centres, as companies like 3M, Mitsui and BASF have done. Finally, we will play our part in tackling climate change. The energy and chemicals industry is a major carbon emitter worldwide. It is the nature of the industry. As a responsible member of the international community, Singapore has committed to reduce carbon emissions by one sixth, once the UNFCCC reaches a legally binding global agreement. As part of a legally binding agreement, this is our commitment. We are working closely with the industry to make it more environmentally friendly, for example, by using more energy-efficient equipment, as you have done in this expanded plant with your co-gen, now 360 mega watts. So we will continue to grow the petrochemical industry, but we must reduce our emissions, both of greenhouse gases as well as other more local pollutants, for example, SO2 – sulphur dioxide.

But at the same time, I want to assure all the energy and petrochemicals companies here that the Singapore Government stands fully behind them and will continue to help them to succeed. These companies, including ExxonMobil, depend on us to maintain a predictable environment for their investments to succeed over the long-term, to make it worthwhile for them to operate in Singapore despite our natural constraints such as land or feedstock. We fully understand these considerations, and we will fully honour our commitments to these companies which have placed their trust in Singapore.

CONCLUSION

So I would like to thank ExxonMobil for being such an excellent partner. We wish you every success with the expanded Singapore Chemical Plant, and we congratulate you on your 120 years in Singapore. I think it is a special kind of a wedding anniversary. We look forward to many more years of success together. Thank you very much.

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