Shell Scratches Singapore Group II Plans


Shell Scratches Singapore Group II Plans
Shell company logo on a flag against a blue sky. © Simone Hogan

Shell has decided not to build an API Group II base oil plant at its Singapore fuels and chemicals complex, according to a Reuters report Thursday.

The company first disclosed that it was considering the project in an earnings report published in February 2022. A final investment decision was never made, and the company never specified what capacity the project might have.

The Reuters article said Shell confirmed that it has decided not to pursue the Group II project or another initiative that had been considered – to convert part of the refinery to make biofuels. The article did not provide a reason for the decision, and Lube Report was unable to reach Shell officials for comment.

The fuels refinery, located on the island of Pulau Bukom, just south of Singapore’s main island, was downsized in 2021 as part of Shell’s efforts to reduce its greenhouse gas emissions. Throughput capacity was reduced then from 500,000 barrels per day to 300,000 b/y.

When it first announced plans for that reduction, the company said it was considering building facilities at the site to manufacture 550,000 t/y of biofuels, such as aviation fuel and diesel made from cooking oil and animal fat. That project has now been shelved.

The fuels refinery includes a base oil plant with capacity to make 386,000 metric tons per year of Group I oils. Originally the company said it would permanently close that plant when the refinery was downsized, but it later decided to keep the plant open, saying it wanted to ensure supply continuity for customers.

At least some output from the Group II plant would presumably gone to Shell’s finished lubricant blending plant on Singapore’s main island. Reuters said Shell stated in an email that it will continue supplying base oils and lubricants to its customers in Singapore and the region.