Shell Refinery at Bukom Island

Oil Giant Shell has decided to sell its Singapore Refinery and Petrochemical assets to a Joint Venture comprising Indonesia’s Chandra Asri and Trading Giant Glencore last week.

CAPGC Pte. Ltd. (“CAPGC”), the joint venture that is majority owned and operated by Chandra Asri Group and minority-owned by Glencore through their respective subsidiary companies, agreed to acquire SECP which comprises a refinery with processing capacity of 237,000 barrels per day of crude oil, a 1.1 million metric ton per annum ethylene cracker on Bukom island, and downstream chemical assets on Jurong Island.

A 60 years old run is finally coming to an end for Shell. Citing lower refinery margin, higher cost associated with running decades old plants, and higher carbon tax going forward, the Oil Giant has finally thrown in the towel.

Goldman Sachs was tasked with finding buyers, which include the likes of CNOOC and Chandra Asri, which has shown keen interest from the beginning.

Chandra Asri is keen on the assets as they are looking to stave off competition from Lotte Chemical, which is constructing an integrated chemical complex on the vast 110ha of land located in the Cilegon City Banten, Indonesia.

Known as LINE Project (LOTTE Chemical New Ethylene Project), it will be a massive chemical plant construction project in which LOTTE Chemical and its subsidiary LOTTE Chemical Titan invests a total of 3.9 billion USD with the goal of completing by 2025. It is expected to produce 1 million tons of ethylene, 520,000 tons of propylene, 250,000 tons of polypropylene and other downstream products such as Butadiene, BTX(Benzene, Toluene, Xylene).

Acquiring Shell’s assets currently in operation in Singapore will give Chandra Asri at least a regional footprint in Southeast Asia and head start compared to building new plants from scratch.

Erwin Ciputra, the President Director and CEO of Chandra Asri Group, said, “This acquisition is another successful outcome of our programmatic M&A strategy to become a leading chemical and infrastructure player in the region, and further strengthen the resilience of our business. This integration of our new energy and chemicals platform in Bukom and Jurong Island, Singapore, with our established presence in Cilegon, Indonesia, will drive expansion of product offerings and service enhancements, enabling us to capture new opportunities in growing Southeast Asian markets. We are delighted to be partnering with Glencore, and eagerly welcome the SECP talent to enrich our joint capabilities, as a very positive conclusion to a highly competitive auction process.”

escveritasEnergyPetrochemicalsShell Refinery at Bukom Island Oil Giant Shell has decided to sell its Singapore Refinery and Petrochemical assets to a Joint Venture comprising Indonesia's Chandra Asri and Trading Giant Glencore last week. CAPGC Pte. Ltd. (“CAPGC”), the joint venture that is majority owned and operated by Chandra Asri Group and minority-owned...Your Industries Online