Shell is considering a sale of its Singapore refining and petrochemical plants as part of a broader strategic review and has hired investment bank Goldman Sachs to explore a potential deal, said several sources close to the matter.
The global energy major’s new CEO, Wael Sawan, is targeting spending cuts over the next two years to boost profitability while remaining committed to achieving net zero emissions by 2050.
Those efforts include the review of energy and chemicals assets on Singapore’s Bukom and Jurong islands, announced in June, as the group seeks to repurpose its energy and chemical parks globally to offer more low-carbon solutions to customers.
“Our strategic review is ongoing and we are exploring several options including divestment,” a Shell spokesperson told Reuters on Wednesday.
Singapore’s position as a regional trading and marketing hub remains important, she added.
Companies that are reviewing Shell’s Singapore assets include Asia’s largest refiner, China’s Sinopec, as well as global trading companies Vitol and Trafigura, the sources said.
For trading companies, the site is seen as a potential oil storage and distribution hub, some of the sources said.
Goldman Sachs, Sinopec, Trafigura and Vitol declined to comment.
The Bukom refinery, Shell’s only wholly owned refining and petrochemicals centre in Asia, can process 237,000 barrels per day (bpd) of crude. Built in 1961, it was Singapore’s first refinery.
The complex also houses a 1 million metric tons per year (tpy) ethylene cracker and a 155,000 tpy butadiene extraction unit. These are integrated with a monoethylene glycol (MEG) plant at Shell’s petrochemicals site on Jurong Island.
In March, Shell decided not to proceed with two projects it was studying to produce biofuels and base oils in Singapore.
