Shell mulls US partnerships, Europe closures for chems assets

LONDON (ICIS)–Shell is looking to improve performance of its chemicals asset base by exploring strategic partnerships in the US and closures in Europe, the UK-based oil and gas major said on Tuesday.

Presented at the firm’s capital markets day on Tuesday, Shell is looking to improve returns and cut capital spent on chemicals by 2030, through “high-grading” and closing select assets in Europe and potentially reducing its equity in US operations.

The Wall Street Journal reported earlier this month that the company had tapped Morgan Stanley to conduct a strategic review of its chemicals portfolio, with potential sales of US and European assets on the table.

The company did not comment on the reports in early March, but the focus on partnerships for its US chemicals assets points to the company retaining stakes in operations such as its Pennsylvania cracker and polyolefins complex.

Shell has already rationalised part of its chemicals footprint in Asia with the sale of its Singapore refinery and petrochemicals assets to CAGPC, a partnership between Chandra Asri and Glencore Asian Holdings. The deal is expected to close in the first quarter of 2025.

The firm has also announced some smaller closures in Europe over the last few years, including its orthoxylene and paraxylene assets in Wesseling, Germany, and its methyl ethyl ketone (MEK) production in Pernis, Netherlands.

The Wesseling assets closed in 2023, with the Pernis measures expected in March-May this year.

A spokesperson for the company declined to comment on what European assets are currently under review, or the timeline for the process.

The capital market day strategy also includes a more substantial push on liquefied natural gas (LNG), targeting a 4-5% annual increase in sales through to 2030.

The company is also looking to increase upstream production with annual oil and gas sales targeted to grow 1% to 2030, meaning that its 1.4 million barrel/day production levels over the next half-decade.

“We want to become the world’s leading integrated gas and LNG business… while sustaining a material level of liquids production,” said CEO Wael Sawan.

The producer is also looking ramp up cost-cutting, from $2 billion – 3 billion by the end of this year compared to 2022 levels, to $5 billion to $7 billion by the end of 2028.

Thumbnail photo source: Shell