Report: Shell considers sale of Singapore refining complex
Shell, the global energy giant, is contemplating the sale of its refining and petrochemical facilities in Singapore, according to a Reuters report. As part of a broader strategic review, the company has engaged the services of investment bank Goldman Sachs to evaluate potential deal opportunities, the report said.
Wael Sawan, Shell CEO, is focusing on cost-cutting measures over the next couple of years to enhance profitability. At the same time, the company remains committed to its goal of achieving net-zero emissions by 2050. This commitment has led to the review of energy and chemical assets on Singapore’s Bukom and Jurong islands, which was announced earlier in June. The objective is to transform its global energy and chemical parks to provide more sustainable, low-carbon solutions to its clientele.
A spokesperson from Shell confirmed to Reuters, “Our strategic review is ongoing, and we are exploring several options, including divestment.” The spokesperson also emphasised the significance of Singapore as a pivotal regional trading and marketing hub.
Several companies, including Asia’s top refiner, China’s Sinopec, and global trading giants Vitol and Trafigura, are reportedly reviewing Shell’s assets in Singapore. For these trading entities, Shell’s site is perceived as a potential hub for oil storage and distribution.
The Bukom refinery, wholly owned by Shell and the only one of its kind in Asia, boasts a processing capacity of 237,000 barrels of crude oil per day. Established in 1961, it holds the distinction of being Singapore’s inaugural refinery. The complex also features an ethylene cracker with a capacity of 1 million metric tons annually and a butadiene extraction unit capable of producing 155,000 metric tons per year. These facilities are seamlessly integrated with a monoethylene glycol plant located at Shell’s petrochemical site on Jurong Island.
Earlier in March, Shell opted not to move forward with two projects in Singapore that were under consideration for the production of biofuels and base oils.