A joint venture between Indonesian billionaire Prajogo Pangestu’s Chandra Asri and commodities trader Glencore has agreed to acquire Shell’s refinery and chemical assets in Singapore. The deal, expected to be completed by the end of the year pending regulatory approval, includes Shell’s interests in Shell Energy and Chemicals Park Singapore, which consists of a refinery, an ethylene cracker, and a petrochemical plant.
While the financial terms of the transaction were not disclosed, Bloomberg reported that the deal could be valued at around $1 billion. As part of Shell’s efforts to improve its chemicals and products business and reduce emissions, the agreement is seen as a significant step forward. Shell’s downstream, renewable, and energy solutions director, Huibert Vigeveno, highlighted the company’s commitment to delivering more value with fewer emissions through this transaction.
Since last year, Shell has been evaluating its Singapore assets for potential divestment. Wood Mackenzie’s analysis identified the Pulau Bukom facility as the “weakest integrated refinery-petrochemical site in Shell’s portfolio,” leading to the decision to sell the assets. Despite the divestment, Shell emphasized that Singapore remains a key part of its operations in the region and reiterated its commitment to the country as it decarbonizes.
Singapore’s importance as a regional hub for Shell’s marketing and trading business was highlighted by Vigeveno, who expressed the company’s intention to maintain a partnership with the country and its customers in the region. In March of this year, the Singapore government formed a consortium with Shell and ExxonMobil to explore the feasibility of a cross-border carbon capture and storage project. This initiative aligns with Singapore’s efforts to reduce carbon emissions and transition to a more sustainable energy future.
The acquisition of Shell’s assets by the joint venture between Chandra Asri and Glencore marks a strategic move in the petrochemical industry, positioning the companies for growth and expansion. With the completion of the transaction expected by the end of the year, both parties are looking forward to leveraging the assets acquired to strengthen their market presence in the region and enhance their overall business operations.
As the energy sector continues to evolve and shift towards cleaner and more sustainable practices, partnerships and acquisitions such as this one play a crucial role in driving innovation and driving towards a greener future. With Shell’s commitment to high-grade its chemicals and products business and reduce emissions, the sale of its Singapore assets represents a significant step in the company’s transition towards a more sustainable and environmentally-friendly business model.
