Shell Singapore to repurpose core business, downsize Pulau Bukom refinery in low-carbon shift

Shell Singapore to repurpose core business, downsize Pulau Bukom refinery in low-carbon shift

FILE PHOTO: A general view of Shell's Pulau Bukom petrochemical complex in Singapore
FILE PHOTO: A general view of Shell's Pulau Bukom petrochemical complex in Singapore on Jul 15, 2019. (File Photo: REUTERS/Edgar Su)

SINGAPORE: Shell Singapore said on Tuesday (Nov 10) that it plans to repurpose its core business and halve its crude processing capacity at its Pulau Bukom oil refinery, as part of an overhaul in its journey towards a low-carbon future.

As part of the transition, Shell will cut 500 jobs by the end of 2023 at the Pulau Bukom site, which now employs 1,300 staff, a Shell spokesperson told CNA.

Shell outlined its path of transformation in Singapore under a 10-year plan on Tuesday that will see it, among other things, aim to expand its solar footprint and network of electric vehicle charging options.

Shell said it was studying the production of products that would still be viable following its energy transition, such as biofuels and specialities like bitumen. It is also looking at using different raw materials, or feedstocks, such as recycled chemicals.

"Today, our extensive presence in Singapore’s energy sector carries with it a carbon footprint," said  Ms Aw Kah Peng, chairman of Shell Companies in Singapore. 

"Our businesses in Singapore must evolve and transform, and we must act now if we are to achieve our ambition to thrive through the energy transition. Our decisive action today will help Shell in Singapore stay resilient and build a cleaner, more sustainable future for all of us," she added.

READ: Shell launches major cost-cutting drive to prepare for energy transition

Shell's business review in Singapore follows a pledge by parent company Royal Dutch Shell to become carbon neutral by 2050, matching a commitment by rival BP as climate change looms large over the energy sector.

The company said it planned to have net zero emissions from the manufacture of all its products by 2050 "at the latest".

The goal is also in line with Singapore's ambition to halve its 2030 peak greenhouse gas emissions by 2050, and to achieve net zero emissions "as soon as viable" in the second half of the century.

DOWNSIZING PULAU BUKOM OPERATIONS

As part of its plans, Shell will reduce the crude processing capacity at Pulau Bukom - its largest refinery - to 250,000 barrels of oil per day from the current 500,000.

The move brings the total refining capacity cuts by Shell in recent months to 571,000 barrels per day, or just over a fifth of its capacity globally.

Pulau Bukom will be one of six oil refining and petrochemical sites Shell will keep, down from the current 14.

"Bukom will pivot from a crude-oil, fuels-based product slate towards new, low-carbon value chains," said Shell Singapore in a press release.

"We will reduce our crude processing capacity by about half and aim to deliver a significant reduction in CO2 emissions," it added.

To do so, however, will also have a corresponding effect on Shell's manpower.

"As Bukom transforms and becomes smaller and smarter, the resizing of operations will result in fewer jobs but more highly skilled jobs as digitalisation and automation progress," the company said.

Shell plans to reduce its staff strength at the site to 1,100 by the end of 2021 and 800 by 2023, a spokesperson told CNA. It currently employs 1,300 staff at the site.

The transition will happen over the next three years and the earliest staff movement related to the reorganisation will only be in the fourth quarter of next year.

In September, its parent company said it planned to cut up to 9,000 jobs globally, or more than 10 per cent of its workforce.

“Singapore is a key hub for Shell. These decisions show how determined we are to remain a part of Singapore’s energy future, just as we have been partners in economic development over the decades,” said Mr Huibert Vigeveno, downstream director and member of the executive committee of Shell. 

“The transformation of our business in Singapore, and in particular our largest refinery on Pulau Bukom into one of our approximately six energy and chemicals parks, is crucial to Shell's ambition of becoming a net-zero emission energy business by 2050 or sooner, in step with society and our customers.”

READ: Shell to cut up to 9,000 jobs by 2022

PILLARS OF SHELL'S BUSINESS TRANSFORMATION

In Singapore, said Shell, it aims to cut its carbon emissions by about a third within a decade.

This transition will be accelerated through three pillars:

First, the company plans to repurpose its core by focusing its manufacturing assets to provide more energy transition resilient products.

Second, it also plans to provide low-carbon solutions for its customers in the following sectors - power, mobility, shipping, aviation and trading.

Third, it will also partner with key stakeholders to "bring about sustainable change".

Aside from plans to expand its solar footprint and network of electric vehicle charging options, Shell Singapore's LNG bunkering joint venture, FueLNG, will also scale up with the arrival of Singapore’s first bunkering vessel in late 2020.

Shell Singapore will also work with customers in Singapore to provide carbon neutral solutions, as well as the National Environment Agency on a joint feasibility study for the set-up of waste segregation facilities and plastic pyrolysis plants to recycle Singapore’s plastic waste.

Source: CNA/Reuters/ic

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