Glencore and Indonesia’s Chandra Asri are set to finalize their acquisition of Shell’s historic refinery in Singapore, with plans to allocate 20% of the output to Shell. The new joint venture, CAPGC, has partnered with Abu Dhabi’s ADNOC for long-term crude supplies and expects to conclude the deal by early 2025. This acquisition will increase Glencore’s trading flexibility in Asia while expanding Chandra Asri’s petrochemical market presence.
Glencore, a Swiss-based trading giant, and Indonesia’s largest petrochemicals producer, Chandra Asri, are nearing the completion of their acquisition of Shell’s Bukom refinery, a landmark facility with a capacity of 237,000 barrels per day. Originally built in 1961, this refinery marks a significant chapter in Singapore’s energy history. As part of the takeover, the new operating company, CAPGC, will manage the refinery’s crude oil purchases and fuel distribution, with Shell remaining a primary customer through a supply agreement.
Glencore and Chandra Asri, through their joint venture CAPGC, plan to complete the acquisition by the first quarter of 2025, pending regulatory approval. CAPGC will operate under a new entity called Aster Chemicals and Energy, which will oversee the facility’s day-to-day operations, crude sourcing, and fuel sales.
The venture has secured long-term crude supplies from Abu Dhabi National Oil Co. (ADNOC) and is in discussions with other producers to bolster supply. This ensures a steady flow of crude, enabling Glencore to meet its trading demands and provide an outlet for Asia-based refined products. Starting in February, Glencore will supply crude to the facility, aligning its trading strategy with increased output flexibility in Asia.
As part of the deal, Shell will continue to procure a portion of the refinery’s output. Through its trading arm, Shell International Eastern Trading (SIETCO), Shell has a two-year agreement with Aster to secure 20% of refined fuels, including gasoline, diesel, and jet fuel, to supply its local service stations. This agreement ensures Shell’s fuel needs in Singapore are met despite the refinery ownership change.
To facilitate a smooth transition, all employees previously supporting the Shell Energy and Chemicals Park Singapore will retain their roles under CAPGC. In addition, four Shell traders transitioned to Aster’s commercial sales department in November, furthering CAPGC’s integration of Shell’s commercial expertise.
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For Chandra Asri, the acquisition provides a platform to consolidate its naphtha purchases across its cracker operations in Indonesia, Thailand, and Singapore. This centralization allows for a more efficient petrochemical supply chain while increasing its petrochemical sales reach in the Asia-Pacific market.
The acquisition signifies a continuation of stable fuel supplies and enhanced operational efficiency. The transition ensures Shell maintains a portion of the refinery’s output, while Glencore and Chandra Asri benefit from increased production capacity and market influence.
Glencore and Chandra Asri are finalizing their acquisition of Shell’s Singapore refinery, marking a strategic expansion into Asia’s energy market. The new venture, CAPGC, will allocate 20% of refinery output to Shell while leveraging a long-term crude supply from ADNOC. This partnership strengthens Glencore’s trading position in Asia and broadens Chandra Asri’s petrochemical footprint across the region.
Sources: Kontan, Routers (2024)
Keywords: Glencore Chandra Asri Deal, Singapore Refinery, Shell Partnership
