Shell Wraps Up Sale of Refining and Chemicals Facility in Singapore

Shell plc SHEL, the British energy giant, has announced that it has concluded the sale of its Singapore refinery and the associated refining assets to a joint venture (JV) owned by Chandra Asri, a petrochemical firm based in Indonesia, and Swiss multinational firm, Glencore. The sale of the Singapore refinery was announced by Shell in 2024. The transaction included Bukom and Jurong Islands refining assets. These assets began operations back in 1961.

Post the closure of the deal, Chandra Asri, which is a majority stakeholder in this JV, will become one of the largest petrochemical firms in Southeast Asia. The financial details of the deal have not been disclosed.

According to Reuters, the new owners of the refining facility have already begun purchasing feedstock from the acquired facility. The new venture shall be named Aster Chemicals and Energy Pte Ltd.

Shell noted that its employees working at the refining facility site shall be retained by the new venture. Reuters mentioned that the office-based staff might have to relocate to new office premises under the new management. However, Shell hasn’t confirmed the relocation of the office-based staff.

Furthermore, sources familiar with the matter have informed that Chandra Asri had already begun purchasing open-spec naphtha for delivering to Singaporein March. Chandra Asri has assumed responsibility for procuring petrochemical feedstock for the new venture, Aster Chemicals and Energy.

While operating under SHEL, the Jurong Island chemical facility’s naphtha imports totaled around 1.5 million tons per year in 2023 and 2024, according to Kpler’s ship-tracking data. In addition, Swiss multinational Glencore has purchased crude to be delivered to Singapore, including crude from Canada and Kazakhstan.

Shell stated that the new company has entered into crude supply deals and product offtake agreements, which will be realized following the closure of the deal. While the British energy giant sold off its stake in the refining and chemical facility, it continues to contribute to Singapore’s energy security through its other businesses, including the supply of liquefied natural gas. The company also plans to expand its retail business in Singapore and invest in electric vehicle (EV) charging infrastructure.

SHEL’s Zacks Rank and Key Picks

SHEL currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks from the energy sector are Archrock Inc. AROC, Nine Energy Service NINE and Kinder Morgan, Inc. KMI. While Archrock currently sports a Zacks Rank #1 (Strong Buy), Nine Energy Service and Kinder Morgan carry a Zacks Rank #2 (Buy) each. You can see the complete list of today’s Zacks #1 Rank stocks here.

Archrock is an energy infrastructure company based in the United States with a focus on midstream natural gas compression. It provides natural gas contract compression services and generates stable fee-based revenues.

Nine Energy Service provides onshore completion and production services for unconventional oil and gas resource development. The company operates across key prolific basins in the United States, including the Permian, Eagle Ford, MidCon, Barnett, Bakken, Rockies, Marcellus and Utica, as well as throughout Canada. With a sustained demand for oil and gas in the future, the need for NINE’s services is anticipated to increase, which should position the company for growth in the long run.

Kinder Morgan is a leading North American midstream player with a stable and resilient business model, largely driven by take-or-pay contracts, which ensure consistent earnings and facilitate reliable capital returns to shareholders.

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This article originally published on Zacks Investment Research (zacks.com).

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