Shell has reduced the imports of crude oil for its refinery in Singapore as repair works at the facility have been extended to next month.
According to a Reuters report, Shell is using ship-to-ship transfers to move the crude it buys for the Pulau Bukom refinery from Very Large Crude Carriers to Aframax tankers. Total volumes have fallen to some 3 million barrels since the start of May, from 7.65 million barrels for the whole of April, data from Kpler cited by Reuters has shown.
Earlier this month, amid the ongoing repairs works on the Pulau Bukom facility's single buoy mooring segment, Shell also reported "an operational upset" that resulted in gas flaring, Reuters reported.
The Pulau Bukom refinery has a daily capacity of 237,000 barrels of crude oil and is the only refinery and petrochemical production facility Shell operates in Asia. It 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.
The development and transformation of the complex reflect Shell's new focus on diversifying its operations away from the core oil and gas business. Other big companies with downstream businesses have also diversified into biofuels, some of them notably turning whole refineries into biofuel production plants.
In the United States, this has led to something of a crunch in refining capacity that led to a diesel shortage at one point last year. As luck would have it, inflation pressured demand for transportation services, which in turn reduced demand and helped the industry avoid a serious shortage of freight transport fuel.
By 2026, global biofuels production capacity is projected to rise from 5.76 billion gallons annually to 21.24 billion gallons annually, according to GlobalData Energy. This would constitute a growth rate of 269%, with North American accounting for the biggest part of the new capacity additions.
By Charles Kennedy for Oilprice.com
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