Energy giant Exxon Mobil is considering a multi-billion-dollar investment at its Singapore refinery to generate products to help the shipping industry meet new environmental rules on fuel.
The proposed upgrade would involve converting lower-value by-products into cleaner ones.
The potentially huge investment is in response to stringent anti-pollution rules announced in 2016 by the International Maritime Organisation (IMO). These will limit the sulphur content of marine fuel to 0.5 per cent from 2020, down from 3.5 per cent now. One estimate puts the cost of compliance at around US$60 billion (S$82 billion) a year for the global shipping industry.
Exxon has a considerable presence in Singapore, which is home to its largest refinery and biggest integrated petrochemical plant.
Mr Matt Bergeron, vice-president of Exxon's Asia Pacific Fuels Business, told the Singapore International Bunkering Conference and Exhibition yesterday: "We are assessing a multi-billion project in our integrated manufacturing facility here."
"We have already made significant investments at a number of other refineries around the world in order to increase our production capacity of cleaner fuels with lower sulphur content."
Exxon said last month that it was planning to spend more than £500 million (S$893 million) to upgrade Britain's largest oil refinery, Fawley, on England's south coast.
The new rules have also prompted responses at the national level here, given Singapore's position as a major marine oil supplier.
The Maritime and Port Authority of Singapore (MPA) is working with stakeholders to ensure that the country is ready to supply low-sulphur compliant fuels ahead of the 2020 global deadline, said Senior Minister of State for Transport and Health Lam Pin Min yesterday.
The MPA will release a list of licensed suppliers of low-sulphur fuels by mid-2019, Dr Lam said.
It has also allocated $5 million under the Green Energy Programme to support the development and use of cleaner alternative marine fuels such as biofuels and methanol.
Firms can tap the fund to conduct research and development in alternative fuels.
Singapore's bunker sales volume crossed the 50-million-tonne mark for the first time last year and turnover in the first half of this year maintained that pace, with the total sold at just above 25 million tonnes.
Dr Lam also told the conference that the MPA has made good progress on LNG (liquefied natural gas) bunkering here. It co-funded the building of eight LNG-fuelled vessels to kick-start the use of the gas as a marine fuel. The first two were delivered this year.
Dr Lam said: "With the impending global sulphur limit and the IMO's commitment to halve carbon emissions by 2050, the bunker industry in Singapore is at an inflexion point. If we are able to overcome these challenges, I am confident that we will be able to take the industry to greater heights."