Shell mulls divestment as an option for Singapore petrochemical assets

Nurluqman Suratman

24-Aug-2023

SINGAPORE (ICIS)–Energy giant Shell is considering divestment of its refining and chemical assets in Singapore as part of an ongoing strategic review of operations, a company spokesperson said on Thursday.

“Our strategic review is ongoing and we are exploring several options including divestment,” a Shell spokesperson told ICIS in an emailed statement.

In June, Shell CEO Wael Sawan had said that the company’s plants at two Singapore sites – Pulau Bukom and Jurong Island – will undergo a “full review” as it seeks to repurpose its global energy and chemicals parks’ footprint to offer more low-carbon solutions.

“This review is in response to the ongoing high grading journey of Shell Group’s Chemicals and Products portfolio over the years, the current challenging market conditions and enhanced capital discipline,” the spokesperson said.

“Singapore’s position as a trading and marketing hub to serve our customers in the region remains important.”

Shell’s cracker at Pulau Bukom, Singapore has ethylene capacity of 1.15m tonnes/year, according to the ICIS Supply and Demand Database.

Its Singapore sites also produce ethylene oxide (EO)/ethylene glycol (EG), butadiene (BD), benzene, ethylbenzene (EB), styrene, polyether polyols, propylene, propylene glycol (PG), propylene oxide (PO) and lubricants.

Newswire agency Reuters reported on 23 August that Shell has hired investment bank Goldman Sachs to explore a potential deal for its Singapore assets, citing unnamed sources.

Companies that are reviewing Shell’s Singapore assets include China’s Sinopec as well as global trading firms Vitol and Trafigura, according to Reuters.

Shell’s spokesperson did not reply to queries regarding the potential buyers mentioned in Reuters’ report.

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