Oil giant Shell sells Singapore refinery it built on Bukom Island more than 60 years ago

May 8, 2024 Vaseline stjohnson 0

Subject to regulatory approval, the transaction is expected to be completed by the end of 2024, Shell added.

CAPGC is majority owned and operated by Chandra Asri Group and minority owned by Swiss miner and commodities trader Glencore through their respective subsidiary companies, the Indonesian infrastructure and chemicals company said in a statement.

Oil storage tanks are seen on Jurong Island off Singapore, where Shell’s monoethylene glycol plant is located. Photo: AFP

Shell’s assets include a refinery capable of processing 237,000 barrels per day (bpd) of oil and a 1 million metric ton per year (tpa) ethylene plant located on Bukom Island, just south of Singapore, as well as a plant that produces monoethylene glycol on Jurong Island, in the west of this Southeast Asian city-state.

Last August it was reported that Shell had hired Goldman Sachs to explore a possible sale of its petrochemical and refining plants in Singapore as part of a broader global strategic review to become a low-carbon operator.

The sale is part of Shell CEO Wael Sawan’s plan to reduce the company’s carbon footprint and focus its operations on the most profitable businesses.

Buyers of Shell’s assets on Bukom and Jurong islands would gain a foothold in one of the world’s major oil refining and marketing centres, but would also face competition from newer refineries in China and elsewhere (the installation of Bukom was opened in 1961), as well as Singapore. The carbon tax will increase dramatically in 2024.

A man walks past a screen displaying the logo of China National Offshore Oil Corp (CNOOC). The Chinese state-owned energy company earlier abandoned the bidding for Shell’s assets in Singapore. Photo: AFP

CAGP and Vitol had been the final bidders for the assets after shortlisted Chinese companies, including state-owned China National Offshore Oil Corp (CNOOC), withdrew.

Acquiring Shell’s plants in Singapore would provide Chandra Asri with naphtha feedstock for its cracker and allow the company to integrate its petrochemical production with refining, which could improve its efficiency and reduce costs.

Chandra Asri operates Indonesia’s only naphtha cracker, which can produce 900,000 tonnes of ethylene and 490,000 tonnes of propylene per year, basic raw materials that are processed at the complex into other petrochemical products.

For Glencore, Shell’s assets would give the global trader a physical foothold for its operations in Asia.

Glencore’s only refining asset is a 100,000 bpd facility in Cape Town that is South AfricaThe third largest refinery. It also owns a lubricants plant in Durban.