Shell has scrapped plans to establish a biofuel unit and a Group 2 base oil refinery in Singapore. The biofuel facility was designed to create 550,000 t/yr of SAF, HVO, and renewable chemicals utilizing renewable hydrogen and waste biofuel feedstocks such as discarded cooking oil and animal fats. It is uncertain how much Group 2 base oil it intends to produce.
HVO and SAF mean hydrotreated vegetable oil, and sustainable aviation fuel respectively.
Shell earlier decommissioned a Group I base oil unit at its Singapore-based 500,000 barrels per day Pulau Bukom refinery. The cancellation of the two projects, however, will have no impact on Shell’s capacity to supply base oils and biofuels to its customers.
“We will continue to supply base oil and lubricants to our customers in Singapore and the area,” the business said on March 31.
Shell was silent about why it was canceling the projects, but market participants speculated that it could be due to anticipated feedstock shortages and a lack of SAF blending mandates in Asia compared to other regions.