Three Chinese Companies Have Been Shortlisted to Bid for Petrochemical Assets in Singapore to Be Divested by Shell

According to ICIS news on December 7, Shell's petrochemical assets in Singapore will be divested. It is reported that three Chinese companies have entered the shortlist of bidders.

Shell's energy and chemical assets in Singapore's Pulau Bukom and Jurong Island include a refinery with a daily output of 237,000 barrels and an ethylene cracker with an annual output of 1.15 million tons.

Divestment of Singapore assets is priority

Divesting the Singapore assets was one of the options Shell was considering as it announced a strategic review of all its global assets.

"Following a strategic review of our Singapore assets, divestitures are our current priority," a Shell spokesman said in an emailed statement. The timetable and further details of the planned divestment were not disclosed.

It is understood that the Shell Pulau Bukom refinery is located on a small island off the coast of Singapore. It is one of six refining and petrochemical plants operated by Shell in Texas, Louisiana, Germany, the Netherlands and Canada. It is also Shell's only wholly-owned refining and petrochemical complex in Asia and Shell's largest wholly-owned refinery in the world.

The plant can process 237,000 barrels of crude oil per day and contains a 1 million tonne/year ethylene cracker and a 155,000 tonne/year butadiene extraction unit, which are integrated with the mono glycol plant at Shell's Jurong Island Petrochemical plant.

Back in 2020, Shell announced that it would halve crude processing capacity and cut jobs at its Pulau Bukom refinery in Singapore as part of reforms to reduce carbon dioxide emissions to zero by 2050.

Shell CEO Wael Sawan said: "The burden on the company's chemical business is particularly heavy because half of the capital used has not yet become productive. The remaining 20% is in Singapore, and Singapore itself has no advantages. Therefore, the company's goal is to first get the chemicals business into a healthy state and then optimize the portfolio.”

Three of the four bidding companies are Chinese companies

Singapore is Shell's largest petrochemical production and export center in the Asia-Pacific region.

According to a Reuters report on December 6, citing unnamed sources, four companies have been shortlisted as bidders for Shell's Singapore assets, three of which are Chinese companies.

According to reports, Chinese state-owned offshore oil producer CNOOC, Fujian private chemical producers Eversun Holdings and Shandong Befar Group, as well as global commodities trader Vitol, were shortlisted.

Reuters reported that Shell requires these companies to submit formal bids before the end of February 2024, and the transaction is expected to be completed by the end of 2024.

Shell neither confirmed nor denied the report, while the three Chinese companies had not responded to ICIS queries at press time.

Wanhua has no intention of acquiring

Months ago, there were reports that Chinese isocyanates company Wanhua Chemical and Chinese petrochemical giant Sinopec were interested in Shell's Singapore assets. Kou Guangwu, president of Wanhua Chemical, told ICIS in late November that the company had no intention of acquiring any refining assets in the short term.