Shell added that, subject to regulatory approval, the transaction is predicted to be accomplished by the tip of 2024.
CAPGC is majority owned and operated by Chandra Asri Group and minority owned by Swiss mining and commodities company Glencore through their respective subsidiaries, the Indonesian chemicals and infrastructure company said in a press release.
Shell’s assets include a 237,000 barrel per day (bpd) refinery and a 1 million metric ton per 12 months (tpy) ethylene plant positioned on Bukom Island, south of Singapore, and a monoethylene glycol plant on Jurong Island within the western a part of Singapore. city-states of Southeast Asia.
Last August, it was reported that Shell had hired Goldman Sachs to explore the potential sale of its Singapore refining and petrochemicals plants as a part of a broader global strategic review aimed toward becoming a low-carbon operator.
The sale is an element of Shell CEO Wael Sawan’s plan to cut back the corporate’s carbon footprint and focus its operations on its most profitable businesses.
Buyers of Shell’s Bukom and Jurong island assets would gain a foothold in one among the world’s largest oil refining and trading centers, but would also face competition from newer refineries in China and elsewhere – the Bukom plant opened in 1961 – and Singapore’s carbon tax is ready to rise sharply in 2024.
CAGP and Vitol were the ultimate bidders for the assets after shortlisted Chinese corporations, including state-owned China National Offshore Oil Corp (CNOOC), withdrew.
The acquisition of Shell’s Singapore plants will provide Chandra Asri with crude oil feedstock for the cracker and enable the corporate to integrate petrochemical production with refining, which could improve its efficiency and reduce costs.
Chandra Asri operates an Indonesian sole naphtha cracker that may produce 900,000 tonnes of ethylene and 490,000 tonnes of propylene per 12 months, basic raw materials which can be further processed into other petrochemical products on the complex.
For Glencore, Shell’s assets will provide the worldwide investor with a physical base for trading in Asia.
