Energy Shift: Shell Offloads Singapore Energy And Chemicals Park To Glencore-Chandra Asri Capital Joint Venture

Shell plc SHEL said its subsidiary, Shell Singapore Pte Ltd, has reached an agreement to sell its Energy and Chemicals Park in Singapore to CAPGC Pte. Ltd.

CAPGC is a joint venture company between Chandra Asri Capital Pte. Ltd. and Glencore Asian Holdings Pte. Ltd. 

Chandra Asri is an Indonesian chemical and infrastructure solutions company and Glencore Plc GLNCY is one of the world’s largest global diversified natural resource companies and a producer and marketer of more than 60 commodities that advance everyday life.

The transition is expected to transfer all of Shell’s interest in Shell Energy and Chemicals Park Singapore, including the physical assets and commercial contracts, to CAPGC.

The decision comes after Shell initiated a strategic review of its Energy and Chemicals Park assets on Bukom and Jurong Island in June 2023.

The Pulau Bukom assets include a 237,000 barrels-per-day refinery and a 1.1 million tonnes-a-year ethylene cracker. Shell Jurong Island occupies more than 60 hectares on Jurong Island and manufactures petrochemicals, including ethylene oxide, ethoxylates, styrene monomer, and propylene oxide.

Also Read: Shell Shifts Gears in South Africa, Reportedly Exits Downstream Unit

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

After the completion, all employees providing dedicated support to the Shell Energy and Chemicals Park Singapore will retain their employment with CAPGC.

The transaction is expected to be completed by the end of 2024.

“This agreement marks a significant step in Shell’s ongoing efforts to high-grade our Chemicals and Products business, and is a testament to our commitment to deliver more value with less emissions, as outlined at our Capital Markets Day last year,” said Shell’s Downstream, Renewable and Energy Solutions Director, Huibert Vigeveno.

At the end of the first quarter, Shell had a net debt of $40.5 billion, with a gearing ratio of 17.7%. 

Shell stock has gained more than 19% in the last 12 months. Investors can gain exposure to the stock via Direxion Hydrogen ETF HJEN and VanEck Natural Resources ETF HAP.

Price Action: SHEL shares are trading lower by 0.47% at $72.63 in premarket at the last check Wednesday.

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