Get 40% Off
🤯 This Tech Portfolio is up 29% YTD! Join Now to Get April’s Top PicksGet The Picks – Just 99 USD

Shell halves Singapore refining capacity, to change chemical feedstock

Published 11/23/2021, 12:18 AM
Updated 11/23/2021, 07:56 PM
© Reuters. FILE PHOTO: A general view of Shell's Pulau Bukom petrochemical complex in Singapore July 15, 2019. REUTERS/Edgar Su/File Photo

© Reuters. FILE PHOTO: A general view of Shell's Pulau Bukom petrochemical complex in Singapore July 15, 2019. REUTERS/Edgar Su/File Photo

By Florence Tan

SINGAPORE (Reuters) - Royal Dutch Shell (LON:RDSa) has halved its crude processing capacity at its Singapore hub and reduced fuel exports, executives said on Tuesday, as the major transits from fossil fuels to cut emissions and meet global low-carbon energy needs.

The refinery on Pulau Bukom will continue to produce naphtha for its ethylene unit, Shirley Yap, senior vice president of chemicals and products at Shell Singapore, told reporters.

Shell has also started testing new chemical feedstocks - pyrolysis oil and bionaphtha - at the cracker, she said, as the major aims to supply olefins with lower carbon footprint to customers like Japanese chemical maker Asahi Kasei Corp.

Shell is a key fuel supplier in Asia and the drop in exports has tightened supplies and propelled margins for refiners in the region back to pre-pandemic levels in recent months.

"The reality is that we've cut a substantial part of our capacity and there's demand for fuels today so we have to ensure that we are doing it at a pace that is in step with our customers and in step with the society," Shell Singapore Chairman Aw Kah Peng said.

"But at the same time ... it can't be turned on with just a flick of the switch as infrastructure needs to be build but we want to be there as quickly as we can," she said.

Shell will build its first pyrolysis oil upgrader to produce 50,000 tonnes per year (tpy) of treated pyrolysis oil for its 800,000 tpy cracker on Bukom in 2023.

Pyrolysis melts plastic waste into products such as pyrolysis oil, which can be upgraded as raw material for plastics and chemicals, although the process isn't commercially proven and consumes a lot of energy.

Other projects in Shell Singapore's pipeline include a carbon capture and storage (CCS) hub and a 550,000 tpy biofuels plant to process waste and vegetable oils into sustainable aviation fuel (SAF). Shell aims to make about 2 million tpy of SAF by 2025 globally although SAF accounts for less than 0.1% of today's global jet fuel demand.

The projects form part of Shell Singapore's plans to cut emissions from its operations by half by 2030, from 2016 levels on a net basis, Shell Downstream Director Huibert Vigeveno said.

Shell did not provide investment figures for the projects.

Energy companies are face increasing pressure from investors, activists and governments to steer away from fossil fuels and rapidly ramp up investment in renewables.

Globally, Shell has pledged to halve emissions from its operations by 2030, as well as reduce its net carbon footprint by 45% by 2035.

Bukom, together with other Shell chemical plants on Jurong Island, forms one of five Energy and Chemical Parks owned by the major globally and is the only one in Asia.

© Reuters. FILE PHOTO: A general view of Shell's Pulau Bukom petrochemical complex in Singapore July 15, 2019. REUTERS/Edgar Su/File Photo

Shell plans to build two chemical conversion units in Asia to convert waste plastics into pyrolysis oil for Singapore, similar to units in the Netherlands with joint venture partner BlueAlp which will be operational in 2023.

Shell previously announced it would trial the use of hydrogen fuel cells for ships in Singapore and is exploring developing a solar farm in a landfill near Bukom.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.