Investment follows decision to shut down refineries and move HQ to the UK
SHELL will build a new pyrolysis oil upgrader unit at its Pulau Bukom site in Singapore as it refocuses its refinery sites to produce circular chemicals. The investment is part of the oil major’s plans to shift from fuels production and follows hot on the heels of its decision to move its headquarters to the UK, which it says will allow it to accelerate cleaner investment decisions.
Shell said in late November that it is investing in a 50,000 t/y upgrader in Singapore to improve the quality of pyrolysis oil that it will produce from waste plastics. Commenting on the decision in a LinkedIn post, Robin Mooldijk, Executive Vice President of Chemicals and Products at Shell, said: “Hard-to-recycle plastic waste can originate from a variety of different sources such as furniture, contaminated packaging and household items. Processing such a broad range of items using pyrolysis technology can produce an inconsistent purity in the pyrolysis oil due to contaminants. Chemical crackers generally have a limited tolerance for lower-grade pyrolysis oil and this restricts the volumes that can be processed.”
The unit will start production in 2023, providing feedstock for its chemicals operations. Alongside the investment, Shell announced it has signed an agreement to supply butadiene produced from plastic waste from its new unit to chemicals company Asahi Kasei, which will make tyres from it. Shell will also build a 35,000 t/y polyols unit on neighbouring Jurong Island which will begin production in 2023.
The investments are part of Shell’s emissions reduction plans announced in February to close seven of its 13 refining sites. It will transform five of the remaining six into “chemicals and energy parks” and is selling its Deer Park refinery to PEMEX. Shell plans to divest, convert or close any refineries in which it has only an interest or is the operator. It has set targets to reduce production of traditional fuels by 55% by 2030 and focus instead on producing more chemicals, including from recycled waste.
Shell said it is also considering plans to build a regional CCS hub to capture emissions from its own operations and those from customers and power plants in Singapore. And it is exploring plans for a 550,000 t/y biofuels facility where hydrogen made from renewable resources and bio-feedstocks such as used cooking oils and animal fats would be turned into lower-carbon aviation fuels, diesel or chemicals.
“Together, these investments will help us to cut carbon emissions at our operations and provide the low-carbon and circular solutions that our customers want, in sectors ranging from chemicals to automotive to aviation,” said Shell Downstream Director, Huibert Vigeveno.
In November last year, Shell outlined a ten-year plan to transform its Singapore operations and noted that the changes at Pulau Bukom will lead to job losses though did not say how many. It also announced it will pioneer the use of digital twin technology at the site.
This article is adapted from an earlier online version.
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