24-8-2023 (SINGAPORE) Shell is contemplating the potential sale of its refining and petrochemical plants in Singapore as part of a broader strategic evaluation. To explore this possibility, the global energy giant has enlisted the services of investment bank Goldman Sachs, according to sources with close knowledge of the matter.
The newly appointed Chief Executive Officer of Shell, Wael Sawan, is focusing on cost reductions over the next two years to enhance profitability while maintaining a steadfast commitment to achieving net-zero emissions by 2050.
As part of these efforts, the company announced in June that it was reviewing its energy and chemical assets located on Singapore’s Bukom and Jurong islands. This review is part of Shell’s global initiative to transform its energy and chemical parks to offer more low-carbon solutions to its customers.
A spokesperson for Shell stated, “Our strategic review is ongoing, and we are exploring several options, including divestment.” She also emphasized the continued importance of Singapore as a regional trading and marketing hub.
Several companies are currently evaluating Shell’s assets in Singapore, including China’s Sinopec, Asia’s largest refiner, as well as global trading firms Vitol and Trafigura, according to insider sources.
For trading companies, the Singapore site is viewed as a potential hub for oil storage and distribution, some of the sources noted.
Goldman Sachs, Sinopec, Trafigura, and Vitol declined to comment on the matter.
The Bukom refinery, which is Shell’s sole wholly-owned refining and petrochemical center in Asia, has a processing capacity of 237,000 barrels per day (bpd) of crude oil. Established in 1961, it was Singapore’s inaugural refinery.
Within the complex, there is also a 1 million metric tons per year (tpy) ethylene cracker and a 155,000 tpy butadiene extraction unit. These facilities are integrated with a monoethylene glycol (MEG) plant situated at Shell’s petrochemicals site on Jurong Island.
In March, Shell opted not to proceed with two projects focused on biofuels and base oils production in Singapore, after conducting studies on their feasibility.
