Shell to Close Singapore Plant


As part of an initiative to decarbonize its refining operations in Singapore, Royal Dutch Shell plans to permanently close its base oil plant in Pulau Bukom during 2022.

The Dutch-Anglo energy giant announced Nov. 10 that it will halve the crude oil throughput to its Pulau Bukom fuels and petrochemicals refinery and introduce production of renewable refined products such as biofuels in order to reduce carbon dioxide emissions. A Shell spokesperson told Lube Report today that the base oil plant will be shut down in July 2022.

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“This decision is consistent with Shell’s intent to enhance the competitiveness of its lubricants business, base oils supply demand balance and the general global decline in Group I base oil demand,” said the spokesperson, who asked not to be identified.

The plant has capacity to produce 386,000 metric tons per year of API Group I base stocks. The lubricants industry has been trending away from Group I oils for more than a quarter century, with refiners steadily building capacity to make Group II and III oils while periodically closing Group I plants. In the past two decades, Shell has closed or sold or exited joint ventures with at least seven other Group I plants – one each in Australia, Taiwan, Japan, the Netherlands and France and two in the United States.

Shell’s only remaining Group I capacity is with two joint ventures: Sapref, a partnership with BP that operates a 172,000 t/y plant in Durban, South Africa; and Raizen, a joint venture with Petrobras that owns a 78,000 t/y plant in Buenos Aires, Argentina.

Shell declined to say if is considering installing Group II or III capacity at Pulau Bukom, one of numerous smaller islands just south of the main island of Singapore. The reduction in crude throughput would presumably reduce potential economies of scale for a base oil plant at that refinery. November’s announcement did say the company is studying the possibility of adding specialties to the refinery’s product slate, but bitumen was the only one that it specifically mentioned.

Shell has announced a number of changes to its business this year aimed both at reducing its carbon footprint and at adjusting to reduced demand for fossil fuels. In October the company said it will sell or close eight of its 14 refineries by 2025. The Pulau Bukom complex is one of the six that it intends to continue operating.