Glencore and Chandra Asri to Acquire Shell's Singapore Refinery

By Trixie Yap, Florence Tan and Chen Aizhu

SINGAPORE (Reuters) – Glencore (OTC:GLNCY) and Chandra Asri are finalizing their takeover of Shell (LON:SHEL)'s significant Singapore refinery. They have established a new operating company and will allocate approximately 20% of the refinery's output to Shell, according to sources close to the deal.

The joint venture, named CAPGC and primarily owned by Chandra Asri, is expected to finalize the acquisition in the first quarter of 2025, pending regulatory approval, later than the previously anticipated completion by the end of this year. A new entity within CAPGC, called Aster Chemicals and Energy, will manage the refinery operations as well as crude oil procurement and fuel sales.

In May, Shell announced the sale of its 237,000 barrel-per-day (bpd) refinery and petrochemical facilities on Bukom and Jurong Islands, a facility which has been operational since 1961. This transition signifies the end of an era for Singapore’s first refinery, delivering Swiss-based Glencore more access to refined products and increasing its trading capacity in Asia while allowing Chandra Asri to enhance its petrochemical market presence.

Aster is anticipated to begin trial runs of various processes by December. Earlier in November, four traders transferred from Shell's trading unit to Aster's commercial sales team.

A Shell spokesperson confirmed that all employees dedicated to supporting Shell's Energy and Chemicals Park in Singapore will retain their jobs with CAPGC after the deal closes.

Glencore is slated to commence crude oil supplies to Aster's refinery starting in February, with the trading firm already seeking incoming cargoes for that month. Neither Glencore, Chandra Asri, nor ADNOC responded to requests for comments regarding crude procurement plans.

This year, the refinery has imported about 130,000 bpd of crude, primarily sour crude from regions including Qatar, Saudi Arabia, the UAE, and Iraq, along with some sweet supply from Brazil, the U.S., Brunei, and Malaysia.

Shell Continues as a Customer

For the products produced at the refinery, Shell International Eastern Trading (SIETCO) will have a two-year agreement with Aster to purchase 20% of refined fuel output, including gasoline, diesel, and jet fuel, which will meet the fuel needs of Shell service stations in Singapore.

Shell has previously indicated that it has signed crude supply and product offtake agreements with CAPGC but has not provided specific details.

The Bukom refinery averaged jet fuel and diesel exports of about 6.8 million barrels per year in 2022 and 2023, based on data from shiptracker Kpler. For petrochemicals, Chandra Asri is assessing the centralization of naphtha purchases across its facilities in Indonesia, Thailand, and Singapore, while also streamlining some of its petrochemical sales.