Shell to Sell Refining and Chemicals Assets in Singapore to CAPGC

Shell Singapore, a subsidiary of the multinational oil giant Shell, has made a significant decision to divest its Energy and Chemicals Park in Singapore to CAPGC, a joint venture (JV) comprising Indonesian chemicals company Chandra Asri and Swiss miner and commodities trader Glencore. This strategic move encompasses the transfer of all of Shell’s interests in the park, including physical assets and commercial contracts.

The Energy and Chemicals Park Singapore, an integral part of Shell’s operations, boasts integrated refining and chemicals facilities situated across Pulau Bukom and Jurong Island. The Pulau Bukom site is particularly notable, housing a refinery with a capacity of 237,000 barrels per day alongside an ethylene cracker capable of producing 1.1 million tonnes annually. Pending regulatory approvals, the transaction is anticipated to be finalized by the culmination of 2024.

Shell’s decision to divest these assets is embedded within a broader strategic assessment unveiled in June 2023. This assessment is geared towards streamlining the company’s chemicals and products portfolio, aligning with evolving market dynamics and a heightened focus on capital efficiency. Despite this divestment, employees at the Energy and Chemicals Park Singapore will seamlessly transition to their roles under the new ownership of CAPGC.

Reflecting on this pivotal agreement, Huibert Vigeveno, Shell’s downstream, renewable, and energy solutions director, emphasized its significance within the company’s overarching objectives. He underscored Shell’s commitment to optimizing its chemicals and products business, aligning with the imperative to deliver enhanced value while minimizing emissions. Vigeveno reiterated Shell’s steadfast dedication to Singapore, highlighting its continued importance as a regional hub for the company’s marketing and trading endeavors. Moreover, amidst Singapore’s ongoing efforts towards decarbonization, Shell anticipates a sustained partnership with the country and its clientele across the region.

In addition to the divestment agreement, Shell and CAPGC have mutually agreed upon crude supply and product offtake arrangements, which will become effective upon the conclusion of the deal. Notably, this agreement aligns with Shell’s broader strategic initiatives aimed at refining and optimizing its operational footprint.

This divestment in Singapore follows a series of strategic maneuvers undertaken by Shell on a global scale. Recently, the company unveiled plans to offload its downstream operations in South Africa, signaling a concerted effort to rationalize its operational portfolio. Furthermore, discussions are underway for the potential sale of Shell’s Malaysian gas station business to Saudi Aramco, underscoring the company’s commitment to strategic realignment and value optimization.

In essence, Shell’s decision to divest its Energy and Chemicals Park in Singapore to CAPGC underscores its strategic imperative to adapt to evolving market dynamics while enhancing capital efficiency. This move reflects Shell’s commitment to sustainable growth and value creation, positioning the company for continued success in the dynamic energy landscape.