REFINERY IN SINGAPORE-Shell to sell Singapore refinery, petchem assets to Chandra Asri and Glencore
Shell (SHEL.L) said on Wednesday it has agreed to sell its refinery and petrochemical assets in Singapore, Asia’s main oil hub, to a joint venture between Indonesian chemicals firm Chandra Asri and Swiss miner and commodities trader Glencore.
Reuters reported last August that Shell had hired Goldman Sachs to explore a potential sale of its refining and petrochemical plants in Singapore as part of a broader strategic review globally to become a lower-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.
The transaction will transfer all of Shell’s interest in Shell Energy and Chemicals Park Singapore to the joint venture company CAPGC, Shell said in a statement. The companies did not provide a value for the deal.
Subject to regulatory approval, the transaction is expected to be completed by the end of 2024, Shell
added.
The buyers of Shell’s assets on Bukom and Jurong islands would gain a foothold in one of the world’s top oil refining and trading centers but would also face competition from newer refineries in China and elsewhere – the Bukom facility opened in 1961 – as well as a Singapore carbon tax set to rise sharply in 2024.
CAPGC is majority-owned and operated by Chandra Asri Group and minority-owned by Glencore through their respective subsidiary companies, the Indonesian company said in a statement.
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 (tpy) ethylene plant located on Bukom island, just south of Singapore, as well as a plant that produces mono-ethylene glycol on Jurong island in the Southeast Asian city-state’s west.
CAGP and Vitol had been the final bidders for the assets after shortlisted Chinese firms including state-run China National Offshore Oil Corp (CNOOC) dropped out.