Shell Singapore declares force majeure on base chemicals

By Yeow Pei Lin and Nurluqman Suratman

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SINGAPORE (ICIS)–Shell confirmed on Wednesday that it declared a force majeure on supply of base chemical products from its Singapore site effective 1 December, because of a technical issue at its cracker complex in Pulau Bukom.

It was the second time since mid-October that Shell had to disrupt supply of base chemicals to customers from its Bukom site.

“Our manufacturing and supply chain teams are working to resume normal operations and supply as soon as possible, so as to minimise the potential impact on our customers and we are keeping our customers updated,” a company spokesperson said in an e-mailed statement to ICIS on Wednesday.

Market sources said that the cracker was shut last weekend and could remain down for up to three weeks since Shell has been seen seeking December cargoes of ethylene and propylene from the spot import markets.

The company’s cracker in Bukom has an ethylene capacity of 960,000 tonnes/year and a propylene capacity of 450,000 tonnes/year. It is part of the Shell Eastern Petrochemicals Complex (SEPC), a fully-integrated refinery and petrochemicals hub across the Bukom and Jurong Islands in Singapore (please see table below).

Shell had said on 27 November that its Pulau Bukom manufacturing site in Singapore would experience some controlled flaring over a few days due to maintenance works, but provided no details on the operational status of the different units at the complex.

Market players said that the cracker outage would support the spot prices of propylene and ethylene in southeast Asia, with Shell currently in the market for prompt cargoes.

Shell was heard to have purchased a prompt first-half December arrival propylene cargo this week after making similar bookings in the previous week.

The company is also understood to be sourcing for ethylene cargoes for December arrival, after it earlier covered a portion of its requirements via pipelines from other Singapore-based producers.

A southeast Asia-based polyols buyer said that it has been informed by Shell Singapore that its polyols shipment will be delayed for two weeks.

Meanwhile, Shell may cut production at its 750,000 tonne/year monoethylene glycol (MEG) plant in Singapore this month on reduced supply of feedstock ethylene, market sources said.

The bulk of the company’s ethylene output in Bukom goes into its own downstream MEG production.

The current run rates of the MEG unit could not be immediately identified.

Source: ICIS

Additional reporting by Michelle Lim, Clive Ong, Matthew Chong and Eric Su