The plant will produce chemicals for the textile and plastics industries when it is up and running by 2011. It is being built by a consortium led by local firm Jurong Aromatics Corp (JAC).

The consortium did not state how many jobs will be created as the exact details are still being finalised.

This is the latest in a string of coups for Jurong Island. Just last month, United States energy giant Exxon-Mobil gave the nod for its second multi-billion dollar petrochemical complex.

Earlier this year, rival Shell also broke ground on its US$3 billion 'cracker' complex, a type of plant producing chemicals, also on Jurong Island.

These two projects take Singapore's total number of crackers to five, making 4.1 million tonnes of ethylene a year. This gives Singapore more than half the capacity of Japan, a major Asian petrochemicals player.

About 60 per cent of JAC is held by the Jurong Energy Corp (JEC), which is majority backed by founders of privately held Vinmar Group - a Houston-based firm that trades and distributes petrochemicals - and the Continental Chemical group of companies which is based in South-east Asia.

Other partners include Swiss-based oil and commodity trading house Glencore, South Korean refiner SK Energy, China polyester producer Jiangsu Sanfang- xiang Industrial Group Corp, and Kuwait investment firm Noor Financial Investment Company.

The Economic Development Board (EDB) has been working to position Jurong Island as the location of choice for such projects amid fierce competition from other locations in China and the Middle East.

Said Mr Julian Ho, EDB executive director for energy, chemicals and engineering services: 'JAC's presence will certainly add to the vibrancy of the ecosystem of companies on Jurong Island, as well as allow for further opportunities for downstream integration.'

JAC director Ewe Ee Foong said Jurong Island had been chosen for its excellent security, top-notch infrastructure and ability to integrate existing and new facilities.

Products from the new plant could be stored in a giant underground oil storage terminal to be built under Jurong Island starting next month.

JTC Corporation's specialised parks development group director, Mr Heah Soon Pah, said: 'A key advantage to the JAC project is the use of the Jurong Rock Cavern to help meet its storage requirements.'

The project will begin construction next year and is slated for completion by 2011.

The plant will use natural gas and condensate as a feedstock and will have an annual output of 2.5 million tonnes of petroleum products and 1.5 million tonnes of aromatics, JAC said in statement yesterday.

JAC said that the plant would largely provide raw materials to textile and plastics manufacturers.

nicholas@sph.com.sg