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HomeLatestShell has announced the sale of its Bukom refinery located in Singapore
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Shell has announced the sale of its Bukom refinery located in Singapore

Shell, the multinational oil corporation, has announced the sale of its Bukom refinery located in Singapore, marking a significant shift in its strategic direction. The refinery, which has been operational since 1961, is recognized as one of the world’s largest oil refining and trading hubs. This move comes as part of Shell’s broader initiative to reduce its carbon footprint and concentrate on its most lucrative ventures.

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The buyers of the Bukom refinery are a joint venture comprised of Indonesian chemicals company PT Chandra Asri and global trading firm Glencore. Chandra Asri, a major stakeholder in the joint venture, operates Indonesia’s sole naphtha cracker, a facility capable of annually producing 900,000 tons of ethylene and 490,000 tons of propylene, crucial raw materials utilized in various petrochemical processes. Glencore, headquartered in Switzerland, is renowned for its production and marketing of commodities such as copper, cobalt, zinc, and nickel, as well as its involvement in trading oil and fuel products.

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The sale encompasses Shell’s Bukom refinery complex, which includes multiple crude distillation units with a combined processing capacity of 237,000 barrels per day (bpd), along with a steam cracker capable of producing 1 million tons annually. Additionally, Shell’s Jurong Island facility, part of the sale, houses several derivative petrochemical units producing key feedstocks like monoethylene glycol and styrene, essential for the polyester and plastic industries. The transaction is expected to conclude by the end of the year, subject to regulatory approval.

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The implications of this sale extend beyond the confines of the companies involved. Glencore’s involvement is anticipated to provide financial support to Chandra Asri’s operations, facilitating crude oil procurement for the Bukom refinery while securing outlets for refined fuel products. Experts suggest that the refinery’s focus may shift towards chemical production in the long term, owing to its potential for greater economic returns.

Chandra Asri is likely to leverage its ownership of the Bukom facility to enhance its feedstock sourcing and logistical capabilities, potentially reshaping its operational strategies. Furthermore, there are indications that Chandra Asri may reconsider plans for a cracker expansion at its Cilegon site, favoring the newly acquired Jurong Island complex as an alternative location for expansion.

While the immediate impact on supply and demand dynamics remains uncertain, the sale of Shell’s Singapore refinery underscores a broader trend within the energy industry towards realignment and optimization of assets in response to evolving market conditions.

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