Glencore would maintain a non-operating minority stake in Shell’s assets in Singapore. Credit: ADIGUN AMPA on Unsplash.

A group including Swiss trading company Glencore and Indonesia’s PT Chandra Asri Pacific are in advanced negotiations to acquire Shell’s assets in Singapore, reported Bloomberg News citing people with knowledge of the matter.

This potential deal could be valued at around $1bn.

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The entities are working out the details of the deal and an official announcement could be made in the coming weeks.

Shell’s assets in Singapore include a refinery with a daily capacity of 237,000 barrels per day (bpd), and a one-million-tonne-per-year ethylene plant on Bukom Island.

The assets also includes a mono-ethylene glycol production facility on Jurong Island in the Southeast Asian city-state’s west.

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According to sources, under the proposed terms, PT Chandra Asri Pacific would take on the role of operator and as majority owner of the assets.

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Glencore would maintain a non-operating minority stake in the assets.

Despite the advanced nature of the discussions, the outcome remains uncertain, with other potential bidders still showing interest in Shell’s assets, according to the sources.

Shell initiated a strategic review of energy and chemicals assets on Bukom and Jurong islands in 2023.

These facilities have been facing profitability challenges, and are up against tough competition from newer refineries, especially in China.  

Earlier this year, Reuters reported that Glencore was looking to acquire Shell‘s oil refinery and petrochemical units in Singapore.

Morgan Stanley is reportedly the investment bank assisting Glencore with the potential deal.

With the purchase of Bukom and Jurong assets, Glencore intends to build a significant physical presence in Asia’s primary oil hub.