Shell Singapore site divestment deal to be completed in Q1 2025

SINGAPORE (ICIS)–Shell expects the deal to sell its energy and chemicals park in Singapore to Chandra Asri and Glencore will be completed by the first quarter of 2025, a company spokesperson said on Thursday.

• Shell assets will be key to Chandra Asri’s growth strategy
• Chandra Asri plans for second petrochemical complex still unclear
• Closing of deal originally scheduled for end-2024

The energy major on 8 May announced the sale, which includes the physical assets and commercial contracts in Singapore, to CAPGC – a joint venture majority-owned by Chandra Asri with Glencore holding a minority stake – for an undisclosed fee.

The transaction was initially scheduled to be completed by the end of 2024.

“The divestment is subject to regulatory clearance and other customary closing conditions,” the spokesperson said.

“Subject to regulatory approval, the transaction is expected to complete by the first quarter of next year.”

Shell and CAPGC have also signed crude supply and product offtake agreements that will come into effect following completion.

A new entity under CAPGC called Aster Chemicals and Energy will operate the facilities and handle its crude oil purchases and fuel sales, newswire agency Reuters said in a 13 November report, citing unnamed sources.

The Shell Energy and Chemicals Park (SECP) in Singapore comprises its integrated refining and chemicals assets on Pulau Bukom and Jurong Island.

The Pulau Bukom assets include a 237,000 barrel/day refinery and a 1.1 million tonne/year ethylene cracker. It was Singapore’s first refinery in 1961.

SECP KEY TO CHANDRA ASRI’S GROWTH PLANS
Chandra Asri in a 4 October statement said that its move to acquire the SECP assets aligns with its growth strategy of “going global” as it seeks to expand in the energy, chemical and infrastructure sector not only in Indonesia but also abroad.

“Through SECP, which is one of the largest oil refineries and trading hubs in the world, Chandra Asri Group will source petroleum products, including gasoline, jet fuel, gas oil, and bitumen to support various industries in Indonesia,” the company said.

“Additionally, Chandra Asri Group will help fill gaps in the supply of chemical products, such as monoethylene glycol (MEG), polyols, and ethylene, propylene, and styrene monomers, to support manufacturing processes in the country,” it said.

“This will ensure that the country’s energy supply is secured as well as reducing dependencies on foreign entities.”

In a presentation to investors in early August, Chandra Asri said that it will establish offtake agreements for both fuel and chemical products, utilizing Glencore’s extensive trading network to “secure beneficial arrangements”.

Chandra Asri currently operates Indonesia’s sole naphtha cracker in Cilegon, which can produce 900,000 tonnes/year of ethylene and 490,000 tonnes/year of propylene.

The new assets in Singapore will boost Chandra Asri’s overall production capacity from around 4.2 million tonnes/year currently to more than 18 million tonnes/year by 2026.

The company is also the sole domestic producer of styrene monomer, ethylene, butadiene (BD), MTBE, and butene-1, with a new world-scale chlor-alkali ethylene dichloride (EDC) plant development on the horizon.

The company’s planned second petrochemical complex, dubbed CAP2, in Cilegon includes a chlor-alkali plant that is expected to produce 420,000 tonnes/year of caustic soda and 500,000 tonnes/year of EDC.

The chlor-alkali plant is expected to be completed by the end of 2026 but Chandra Asri has not yet provided a firm timeline of the other proposed plants previously announced for CAP2.

Focus article by Nurluqman Suratman

Thumbnail image: Chandra Asri’s olefins plant in Cilegon, Banten province (Source: Chandra Asri official website)