Industrial gases and engineering group Linde has signed a long-term agreement to ramp up its hydrogen supply to ExxonMobil Asia Pacific.
Linde will invest US$1.4 billion (S$1.9 billion) to expand its existing gasification complex on Jurong Island to produce and supply additional hydrogen and synthesis gas, the company announced yesterday. Synthesis gas is for the manufacture of, among other things, speciality chemicals.
The move is to support ExxonMobil's plan to expand its production of higher-value base stocks for lubricants and distillates from fuel oil and other bottom-of-the-barrel crude products. Hydrogen and synthesis gas are needed for this process.
ExxonMobil's multibillion-dollar project, which includes the world's only steam cracker capable of cracking crude oil, is slated to be completed by 2023. When complete, it will also be able to increase production of low-sulphur fuel to meet the International Maritime Organisation's 0.5 per cent requirement for all ships by next January.
Neither Linde nor ExxonMobil would say if the increased hydrogen capacity would cater to external downstream usage - such as power generation (as a mix with natural gas) and vehicular fuel. Linde, however, said the gases would be supplied to "other customers on Jurong Island". It declined to say who these might be, citing "commercial sensitivity".
The deal comes hot on the heels of a Singapore government tender inviting parties to study the feasibility of importing hydrogen for downstream uses.
Linde, which merged recently with rival Praxair, would not reveal the amount of gases it would be supplying the oil giant - again citing "commercial sensitivity" - but claimed it would be "the single largest sale of gas contract" since its merger last October.
It said its project will include building and operating four more gasifiers, a 1,200 tonne-per-day air separation plant, as well as proprietary downstream gas processing units and sulphur recovery plants.
Linde will also build dedicated pipelines for the transfer of feedstocks and products between ExxonMobil and Linde facilities.
Its engineering division will design and build the new facility. Construction is expected to start in the second half of this year, with start-up anticipated in 2023.
Linde Asia-Pacific executive vice-president Sanjiv Lamba said: "Our Jurong Island facility has a longstanding history of processing refinery residue to produce carbon monoxide and hydrogen. This expansion will allow us to process additional heavy residues efficiently."
ExxonMobil chairman and managing director Gan Seow Kee said: "This agreement marks an important milestone in our partnership with Linde, and the integration will further enhance the operational capabilities of our respective facilities."
Although observers reckon Linde's move to ramp up its hydrogen production is mainly to cater to ExxonMobil's expansion plans, they point out that the company is also a leader in hydrogen refuelling infrastructure.