Source : Business Times - 4 Nov 2008
WATERFRONT properties are usually popular with homeowners - many are willing to pay a premium just to enjoy the view of the sea, lake or river right from the comfort of their own homes. But waterfront land is also valued by industries, especially those involved in marine and offshore engineering work. This has little to do with the view of course. For these heavy industries, having facilities by the water is essential for the movement of goods and for the building of ships and oil equipment.
In land-scarce Singapore, the shortage of industrial waterfront land is keenly felt and this is something to which JTC Corporation is paying full attention.
‘JTC is aware that there is a high demand for waterfront land by small and medium-sized enterprises for the loading and unloading of goods, and by the marine and offshore engineering companies for their manufacturing operations,’ a spokesman said in June.
And as the key driver of the country’s industrial growth, it comes as no surprise to know that JTC has been hard at work to resolve this issue. Celebrating its 40th anniversary this year, JTC has played a pivotal role in introducing innovative space solutions to anchor important activities critical for economic development.
Thinking out of the box, JTC is exploring the concept of a shared waterfront facility to optimise the use of waterfront land. The idea originated from Brisbane, Australia, which has a common jetty facility for its leisure marine industry, and JTC is looking at adapting the model for industrial use.
The agency is still in the preliminary stages of a feasibility study, which could lead to a shared waterfront facility taking shape at Tuas View. Many industrial firms located on waterfront land at Tuas today already have their own facilities. But with the growth of the marine and oil and gas industries, demand for more of such land looks set to outstrip supply, even with the higher price tag that comes along with it.
For land in the Tuas region, JTC charges a land rent of $10.01 to $16.93 per square metre (psm) per annum, or an upfront premium of $164 to $345 psm on a 30-year lease. Waterfront sites in Jurong command an additional waterfrontage fee of $594 to $891 per metre run per annum.
Therefore, beyond optimising usage, JTC is also looking at creating more usable industrial waterfront land. This could involve increasing the depth of waters around Tuas View.
As Prime Minister Lee Hsien Loong said at JTC’s 40th anniversary dinner in June: ‘Land will always be scarce in Singapore, but with human creativity and ingenuity, we can find new ways to do more with the limited amount we have.’
Indeed, land is a much sought-after resource in Singapore. It houses facilities not just for the manufacturing of products but for the storage of goods as well.
In a bold attempt to overcome land limitations, JTC is extending its cutting-edge innovations to the sea through Very Large Floating Structures (VLFS). Offering more space for oil product and petrochemical storage, the VLFS will help bolster the country’s standing in the oil trading and bunkering industry.
The project makes huge business sense given the strong demand for storage and logistics terminals in the industry.
According to JTC, several companies have indicated their interests in setting up such terminals here. Oil traders have said that they would like Singapore to have additional storage capacity for refined oil products. Such capacity would also serve oil majors’ storage needs during plant shutdown and maintenance periods.
Singapore currently has 4.6 million cubic metres of independent petroleum storage and the private sector is constructing another 3.5 million cubic metres. Even with the additional capacity however, industry feedback indicates a shortage of at least three million cubic metres of oil storage, which would require more than 100 hectares of land to accommodate.
Adding to demand for storage, oil-rich countries such as Brazil and UAE have been scouting for overseas facilities to house their reserves.
‘This augurs well for Singapore and countries in Asia if we are able to meet their demand,’ said JTC’s assistant chief executive Philip Su at an oil storage conference StocExpo Asia last year. ‘We will continue to build on our capabilities and expand our storage capacity in recognition of the potential economic benefits to all our partners.’
Feasibility studies for the VLFS, co-funded by JTC, the National University of Singapore (NUS) and the Maritime and Port Authority (MPA) of Singapore have started. The first phase lasted 12 months and when completed in June 2007, concluded that the VLFS would be technically feasible in Singapore waters.
The VLFS is designed as a collection of large floating platforms which can either be moored to land or operated as standalone units out in the sea. Operations for a VLFS attached to land will be supported by existing land facilities. A standalone VLFS, on the other hand, will be self-sufficient and come with facilities to support its own operations.
For flexibility in determining the amount of storage capacity needed, the floating platforms can be dismantled, removed or even relocated elsewhere.
Each platform is made up of two rectangular modules. Matching the size of two football fields, the two modules measure 180m x 80m x 15m with a capacity of about 150,000 cubic metres.
The VLFS is likely to have an initial minimum storage capacity of 300,000 cubic metres, which is equivalent to the size of a very large crude carrier.
The amount of land saved is significant. For 300,000 cubic metres, the VLFS only needs five hectares of foreshore area. A land storage facility of the same storage capacity would require at least 20 hectares of land area.
The VLFS is also designed to store any type of oil and petrochemical products. To be constructed out of concrete, the structure will be durable, fire-resistant and relatively easy to maintain. The VLFS will meet the exacting needs of oil traders and bunkers given its capacity for high product turnover and top grade oil products.
Construction time is also short, ranging from 18 to 24 months for 300,000 cubic metres of storage. Early indications show that the cost of the VLFS will be comparable to that of land-based oil storage structures.
Even though details are still in the works, the project has shown business potential. ‘JTC is already in talks with several oil trading companies who have expressed strong interest in the VLFS,’ said Mr Su at the conference.
But development should not come at the expense of the environment and JTC is conscious of this. The VLFS, being afloat in the sea, will allow sea water to flow underneath the floating modules and will not cause any irreversible damage to the marine ecosystem.
Moving forward, JTC will be inviting local and foreign specialists to conduct detailed feasibility studies on the best location for the VLFS, assess its environmental impact, carry out basic engineering design and evaluate the best business model for it.
‘If everything goes according to plan, Singapore will be the first nation in the world to have a floating oil storage structure made of concrete,’ said JTC chief executive Ow Foong Pheng in the agency’s 2007 annual report.
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