Singapore underground storage construction delayed again
04.07.2010 - NEWS
April 7, 2010 [Bunkerworld] - Work on Singapore's underground oil storage rock caverns on Jurong Island has been delayed due to technical issues previously not taken into account, sources close to the project told Bunkerworld.

The sources added that this latest batch of technical issues, unlike previous hiccups in the project’s development, would require a significantly extended period of time to resolve.

Construction of the oil storage rock caverns, which was awarded to South Korea’s Hyundai Engineering & Construction in early 2009, was scheduled to start at the end of 2009.

One Singapore-based engineer told Bunkerworld on Tuesday that “the fact construction did not commence as planned due to technical issues even with Hyundai on board, says some very significant things about exactly how serious these issues are.”

“I will be only mildly surprised if the entire project is cancelled, especially if the issues have to do with structural stability of the site’s underground geography.”

The $594-million (S$890 million) ‘design and build’ contract was awarded to Hyundai a year and a half after the tender was first announced by state agency JTC Corporation late in 2007.

JTC announced then that construction would start end-2009, a move welcomed by stakeholders.

JTC’s publicly announced project progress deadlines had since the very start not been met on the back of delays in one form or another, mostly for technical issues.

Stakeholders are counting on the project to alleviate concerns that storage space on Jurong Island is running out.

Jurong Island houses oil tanks operated by various major global and local players.

A JTC spokesperson was surprised when Bunkerworld called earlier Tuesday to ask if construction work had commenced as scheduled.

The spokesperson said that “it should have started”, but was not able to give confirmation, requesting a few minutes to check with engineers directly responsible.

Since then Bunkerworld has not been able to obtain an official statement or any details or confirmation about construction commencement.

The first two Jurong Rock Caverns (JRC) providing 480,000 cubic metres (m³) of oil storage were expected to be ready in the first half of 2013, later than the originally planned 2010 start.

The entire first phase, comprising five caverns, will offer a total of 1.47 million m³ when completed in 2014.

The cost for phase one JRC had as of April last year run up to $627 million (S$940 million) from an earlier estimate of $467 million (S$700 million).

JTC officials had also said then that the operator of JRC would be announced by the middle of last year.

It is unclear at the moment what progress has been made regarding an operator signing on to JRC.

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