Shell to stop biofuel and base oil projects in Singapore

Petrochemicals giant Shell is stopping the exploration of two projects in Singapore. The projects are a biofuels unit and a Group II base oil plant, the company said in early April.

The biofuels project would have produced low-carbon fuels such as sustainable aviation fuel, renewable diesel for road transport or renewable chemicals, while the Group II base oil project would have produced base oil that goes into the making of advanced lubricants.

But the company said its Powering Progress strategy, which aims to accelerate the transition of its business to net-zero emissions, remains unchanged and that it will continue supplying base oil and lubricants, as well as biofuels to its customers in Singapore and the region.

Shell said this is a part of its commitment to accelerate its transition and cut its own emissions from its operations by half in 2030, from 2016 levels. As it reduces production of traditional fuels in Singapore, including halving its crude processing capacity, it is developing plans to produce sustainable aviation fuel and to set up a carbon capture and storage hub, which would capture and safely store emissions for Shell and its customers in the region.

Shell announced in late 2021 that it was studying a 550,000 tonnes per year project (tpy) at Singapore’s Bukom Island to produce sustainable aviation fuel (SAF) to supply major Asian hubs such as Hong Kong International Airport and Singapore’s Changi. The company had planned to make a final investment decision for the project, which would have the flexibility to produce renewable diesel and bionaphtha feedstock for petrochemicals, by early 2023.