Glencore may acquire Shell's oil operations in Singapore after several previous candidates for the assets changed their minds about competing for them.
This is according to unnamed sources who spoke to Reuters, saying that the Swiss commodity trading major was currently in the process of evaluating the assets with the help of Indonesian PT Chandra Asri Petrochemical.
The assets in question include Shell's Singapore refinery, which has a capacity of 237,000 barrels daily, an ethylene plant, and a mono-ethylene glycol production facility in the vicinity. These were subjected to a strategic review in June last year and following that, Shell decided to get rid of them.
The refinery started as an oil storage and refinery complex but over the years grew into a more complex facility that also produces biofuels and recycles plastics, according to the company.
Previously, there were four potential buyers of the assets that Shell said it wanted to divest from last year. These included Vitol and three Chinese companies, including CNOOC and two petrochemical producers-Befar Group and Eversun Holdings.
These, according to the Reuters sources, have now dropped out of the race, clearing the space for another buyer. Per the sources, Glencore is working with Morgan Stanley on drafting a deal with the Big Oil major.
China's Sinopec was also among the prospective buyers for the Singapore assets but in August last year, it said it would instead invest in a natural gas project in Saudi Arabia, in partnership with TotalEnergies.
The acquisition will give the commodity trader a physical presence in Singapore, which is a major regional oil hub. However, Reuters notes that the two petrochemical facilities that Shell is selling are old and are finding it increasingly difficult to compete with newer refineries and petrochemical complexes in China.
Shell planned to have the fate of the Singapore assets sealed by the end of this year.
By Irina Slav for Oilprice.com
Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry. More