Tuesday, July 16, 2024

PT Chandra Asri Pacific to acquire Shell Energy, Chemicals Park in Singapore

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PT Chandra Asri Pacific (TPIA) has revealed its participation in a rigorous bidding process to acquire assets of Shell Energy and Chemicals Park in Singapore from Shell Singapore Pte Ltd., facing formidable competitors from various countries.

Finance Director of Chandra Asri Pacific, Andre Khor, confirmed the consortium’s successful bid for the assets following a highly competitive auction process initiated by Shell.
Through its joint venture with Glencore, CAPGC Pte Ltd, TPIA will acquire 100 percent of the shares of Shell Energy and Chemicals Park from Shell Singapore Pte Ltd.

Recent reports have speculated the acquisition’s value ranging from US$300-500 million (Jefferies) to US$1 billion (Bloomberg). TPIA’s cash balance as of the first quarter of 2024 amounted to US$1.03 billion.

“Shell decided to divest these assets after a competitive bidding and divestment process to the Chandra Asri and Glencore consortium,” Andre said during the Analyst Meeting on Tuesday, May 14, 2024 as quoted by Investor.id.

TPIA is currently awaiting approval for the acquisition from the Singaporean government, given the strategic importance of the assets to Singapore. The company aims to complete the entire acquisition process by the end of this year.

Andre emphasized the thorough selection process undertaken by Shell to determine the winning bidder for the Shell Energy and Chemicals Park assets, which include a crude oil refinery with a processing capacity of 237,000 barrels per day, a 1.1 million metric ton per year ethylene cracker on Bukom Island, and downstream chemical assets on Jurong Island.

He noted the extensive competition involved in the bidding process and expressed confidence in the fairness of the evaluation that led to the successful agreement.

Regarding the acquisition’s financing, Andre assured that it would be sourced internally from Chandra Asri, emphasizing the company’s robust financial position and adequate resources to complete this strategic investment.

This ownership will enable TPIA to directly process crude oil and produce fuel products such as gasoline, diesel, aviation fuel, and asphalt – products that were not previously manufacturable at TPIA’s facilities.

Additionally, Glencore’s involvement as a strategic partner, being one of the world’s largest commodity traders, is expected to enhance TPIA’s global competitiveness through distribution networks and oil supply stability.

According to Reuters, Glencore is likely to provide credit facilities for crude oil procurement and act as a standby buyer for fuel products, further strengthening the partnership’s potential.

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