Kevin Foster of global energy and commodity price reporting agency Argus Media on Thursday (10 November) published an article summarising the reasons behind Shell’s decision to scale back on its Singapore refinery as well as some of the market implications:
Shell is planning to cut around 250,000 b/d of refining capacity in Singapore and shift its product slate away from oil-based fuels to lower carbon alternatives, as part of its company-wide move towards net-zero emissions by 2050.
The company said today that it will reduce crude processing capacity at its 500,000 b/d Pulau Bukom refinery in Singapore by around half under a 10-year plan to significantly reduce its emissions in the country. Bukom, the company’s largest refinery, “will pivot from a crude-oil, fuels-based product slate towards new, low-carbon value chains.”
Shell is studying production of products that it described as “resilient to the energy transition”, such as biofuels, and more speciality products such as bitumen. It is also looking at using feedstocks based on greater circularity and renewable raw materials such as recycled chemicals.
The planned cuts at Bukom are the latest changes to Shell’s downstream business. The company decided in August to permanently close its 110,000 b/d Tabangao refinery in the Philippines and convert it into an import terminal because of regional oversupply and the impact of the Covid-19 pandemic.
Shell is already planning to reduce its refining portfolio from 14 sites to concentrate on six “energy and chemical parks” around the US Gulf coast, northwest Europe and in Singapore. The company is exiting 450,000 b/d of North American capacity — including the 240,000 b/d plant in Convent, Louisiana, which it will shut this month — to reduce its refining footprint.
Shell is aiming to cut its carbon emissions in Singapore by around a third within the next decade. This will involve repurposing its core business, as well as providing low-carbon solutions in sectors such as power, mobility, shipping, aviation and trading. Its FueLNG joint venture will take delivery of Singapore’s first LNG bunkering vessel later this year.
The company plans to reduce staff numbers at Bukom from 1,300 now to around 800 by the end of 2023 as part of the refinery changes, starting in the fourth quarter of next year. Shell told its staff last month that it expects to cut up to 9,000 jobs by the end of 2022, more than 10pc of its workforce, as part of a structural reorganisation to shift towards a low-carbon future.
Shell’s planned capacity reduction at Bukom adds to refinery cutbacks and closures elsewhere in Asia-Pacific, including Australia and New Zealand, but is the first to affect Singapore, which is home to almost 1.4mn b/d of export-oriented refining capacity and major downstream petrochemical operations.
Photo credit and source: Argus Media
Published: 11 November, 2020
Bunker orders of ISO 8217:2010 spec LS 380 cSt 0.5% for Nord Gemini, Nord Titan, Ocean Rosemary, and Luzern were placed through global commodities trading and logistics house Trafigura Pte Ltd.
While Covid-19 concerns are important, Captain Rahul Choudhuri was quick to note this does not mean bunker fuel related issues have indeed disappeared from the shipping sector.
‘Therefore, representing the players of the Malaysian bunker industry, we sincerely hope that this matter can be refined and reconsidered immediately so that all parties benefit together,’ says communication.
Maureen Poh, a Director of Helmsman LLC, offers plain practical tips on the differences between US and EU Sanctions and shares some thoughts on what companies could do if they are potentially exposed to sanctioned entities.
‘We [Consort Bunkers] have the opinion that the bunker business in Singapore is not related to the widely reported earlier cargo commodity trading mishaps,’ company source tells Manifold Times.
Representatives of INTERTANKO, Helmsman and Rajah & Tann gather to discuss IMO 2020, legal frameworks for the purchase and supply of alternative marine fuels, and the handling of bunker claims.