Shell is reviewing its operations in Singapore, with a view to repurposing, selling or decommissioning the assets in Bukom and Jurong Island. The energy and chemicals giant will also “high-grade and right-size” its energy and chemicals parks in Europe, also retiring certain units.

The plans were revealed at its Capital Markets Day held in New York, USA, on Jun. 14, where Shell said it intends to focus chemical production in North America and China where it has a feedstock or other competitive advantage.

The company added that its joint-venture production in Nanhai, China – CNOOC and Shell Petrochemicals Company (CSPC) — is “absolutely top quartile”, while in the US — particularly in the Gulf Coast — it has its leading linear alpha olefins technology that it described as “very robust also from a return standpoint.” Shell also noted its advantaged position at operations in Scotford, Canada.

CEO Wael Sawan said Singapore does not have advantaged feedstock, nor advantaged energy or utility costs. The Singapore assets include a refinery and petrochemicals hub that includes production of ethylene, propylene and butadiene, and derivatives such as ethylene glycol.

On Jurong Island, Shell is a partner in two joint ventures – Petrochemical Corp. of Singapore (PCS) and The Polyolefin Co. (TPC). Shell jointly holds 50% of PCS with Qatar Petroleum, with Japan-Singapore Petrochemicals (JSPC), led by Sumitomo Chemical, holding the other 50%. Shell and Qatar Petroleum also jointly hold 30% of TPC, with Nihon Singapore Polyolefin — again led by Sumitomo Chemical – holding the remainder.

With regard to expenditure on chemicals going forward, CFO Sinead Gorman said Shell will “largely focus on spend that sustains our current business, with an expectation that capital employed will be flat in 2030 versus today.”

The plans unveiled by Shell follow in the footsteps of other industry giants such as BASF and Dow, both of which announced cost-cutting programs that include plant closures and job losses. BASF said in February that it will close several plants at its key Ludwigshafen site in Germany because of high production costs. In January, Dow announced a $1 billion cost saving drive for 2023 that could see plants closed in Europe and around 2,000 jobs eliminated.