Shell sells Singapore petchem assets to Chandra Asri/Glencore jv; in talks for sale of petrol stations in Malaysia to Aramco

Energy major Shell says it has agreed to sell its refinery and petrochemical assets in Singapore to CAPGC Pte, a joint venture between Indonesian chemicals firm Chandra Asri and Swiss miner and commodities trader Glencore Asian Holdings. Terms were not disclosed and the transaction is expected to complete by the end of 2024, according to Shell. The transaction will transfer all of Shell’s interest in Shell Energy and Chemicals Park Singapore to CAPGC.

Reuters had earlier reported 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 buyers of Shell's assets on Bukom and Jurong islands will gain a foothold in one of the world's top oil refining and trading centres but also face competition from newer refineries in China.

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-tonne/year ethylene plant located on Bukom island, just south of Singapore, as well as a plant that produces mono-ethylene glycol on Jurong island.

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.

Acquiring Shell's plants in Singapore would provide Chandra Asri with naphtha feedstock for its cracker and allow the company to integrate its petrochemical production with refining which could improve its efficiency and reduce costs.

Chandra Asri operates Indonesia's sole naphtha cracker, which can produce 900,000 tonnes of ethylene and 490,000 tonnes of propylene annually, basic raw materials that are further processed at the complex into other petrochemicals.

For Glencore, Shell's assets would give the global trader a physical foothold for its trading in Asia.

Glencore's only refining asset is a 100,000 bpd facility in Cape Town that is South Africa's third-largest refinery. It also owns a lubricants plant in Durban.

Meanwhile, according to Reuters, Shell is said to be in talks with Saudi Arabia's state-owned Saudi Aramco to sell its gas station business in Malaysia, the second-largest such network in the country, in a deal worth up to US$1 billion.

London-based Shell wholly owns around 950 fuel stations in the country, with only Malaysia's state-owned Petronas operating a bigger network.

In addition to its fuel stations, Shell sells industrial lubricants, produces crude oil and natural gas offshore of Sarawak and Sabah states, and is a joint venture partner in two liquefied natural gas (LNG) ventures.

The sale is part of Shell CEO Wael Sawan's efforts to focus the company's operations on the most profitable businesses.

Saudi Aramco does not have fuel stations in Malaysia, although it owns 50% of the 300,000-barrel per day (bpd) Pengerang refinery in Johor in a joint venture with Petronas, which sells fuel domestically and for export.

Aramco operates petrol stations in Saudi Arabia and also operates fuel stations elsewhere in joint ventures with French major TotalEnergies and South Korea's S-Oil Corp .

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