Shell inks deal to divest integrated Singapore refining, chemical assets

May 8, 2024
Shell PLC has entered a deal to sell the entirety of its interest in subsidiary Shell Singapore Pte. Ltd.’s (SSPL) integrated refining and petrochemical operations in Singapore.

Shell PLC has entered a deal to sell the entirety of its interest in subsidiary Shell Singapore Pte. Ltd.’s (SSPL) integrated refining and petrochemical operations in Singapore as part of the parent company’s broader attempt to achieve net-zero emissions across its global operations by 2050.

Under the sales and purchase agreement signed on May 8 deal, SSPL has agreed to transfer 100% of its ownership in Shell Singapore Energy Park Pte. Ltd.’s dual-site Singapore energy and chemicals park (SECP) on Bukom Island and Jurong Island to CAPGC Pte. Ltd., a joint venture of Indonesia-based PT Chandra Asri Pacific Tbk (Chandra Asri) subsidiary Chandra Asri Capital Pte. Ltd. (CACPL; 80%) and Glencore PLC’s Glencore Asian Holdings Pte. Ltd. (GAHPL; 20%), according to a series of separate releases, investor presentations, and regulatory filings from the companies.

Upon completion of the proposed deal, CAPGC—established in Singapore by CACPL and GAHPL on Apr. 23, 2024—will become owner and operator of SSPL’s existing manufacturing assets at the SECP, including a 237,000-b/sd refinery and integrated 1.161-million tonne/year (tpy) ethylene cracker on Pulau Bukom, as well as SSPL’s production on Jurong Island of styrene monomer, propylene oxide, high-purity ethylene oxide, monopropylene glycol (MEG), polyols, ethoxylates, and onoethylene glycols, Chandra Asri said.

In addition to physical manufacturing assets, CAPGC would take over SSPL’s existing commercial contracts as well as associated infrastructure at the site, including jetties, storage tanks, and pipelines, Chandra Asri told investors.

The proposed acquisition of the SECP comes as part of a joint plan by Chandra Asri and Glencore to remain competitive amid the energy transition by leveraging the integrated site’s strategic location and production capabilities to provide an array of fuels and petrochemical products to the Asia Pacific’s growing southeast markets, the partners said.

Based upon its shareholding, Chandra Asri told investors the acquisition also would allow Indonesia access to production to help make up for existing supply shortfalls in the region by providing an additional:

  • 34,000 b/d of gasoline.
  • 23,000 b/d of bitumen.
  • 6,000 b/d of jet fuel.
  • 65,000 tpy of ethylene.
  • 45,000 tpy of propylene.
  • 370,000 tpy of MEG.
  • 238,000 tpy of polyols.

Following closing of the proposed transaction—which, pending regulatory approval, is scheduled to occur by yearend 2024—CAPGC said it would retain all of the SECP’s current staff.

Ongoing downstream cuts

Shell’s planned sale of the Singapore operations follows the company’s accelerated program of divesting or transforming its downstream operations, the most recent of which includes subsidiary Shell Deutschland Oil GMBH’s confirmation earlier this year that it will repurpose an existing hydrocracker to production of base oils—as well as eliminate crude processing entirely by 2025—at its 140,000-b/d refinery at Wesseling, Germany, which together with the Godorf refinery near Cologne-Godorf, form its 339,000-b/sd integrated Rheinland energy and chemicals park, Germany’s largest, according to a Jan. 25 release from the operator.

Previously committed to achieving net-zero emissions by 2050, Shell has since backed off any guarantees of its ability to fully decarbonize its operations by the global target deadline, informing investors that—based on the current economic environment and the operator’s 10-year planning period that does not yet include 2050—if society is not net-zero in 2050, there would be “significant risk that Shell may not meet this [2050] target.”