According to an informed source, Glencore (GLNCY.US) and the Indonesian petrochemical company Chandra Asri are about to complete the acquisition of Shell (SHEL.US) Singapore refinery. The two companies have established a new operation company and will reserve about 20% of the output for Shell.

One of the sources stated that the joint venture has reached a long-term crude oil supply agreement with Abu Dhabi National Oil Company (ADNOC) and is negotiating further crude oil supplies with other producers.

A Shell spokesperson stated that the joint venture named CAPGC is majority-owned by Chandra Asri and is expected to complete the acquisition in the first quarter of 2025, pending regulatory approvals, which is later than its earlier target of completing by the end of this year.

Sources say that a new entity under CAPGC named Aster Chemicals and Energy will operate these facilities and handle its crude oil procurement and fuel sales.

In May this year, Shell announced the sale of its refineries, steam cracking units, and petrochemical facilities on Pulau Bukom and Jurong Island, which produce 0.237 million barrels of crude oil per day. The exact amount has not been disclosed.

This acquisition will provide Glencore with more channels for refined oil and crude oil exports, increasing its flexibility and trade volume in asia, while Chandra Asri will expand its market share in petrochemical products.

One source indicated that the plan is for Aster to begin trial operations for various processes of the new business structure in December. Two of the sources mentioned that in November, four traders were transferred from Shell's trading department to the commercial sales department of Aster Chemicals and Energy.

A spokesperson for Shell stated: "All employees providing dedicated support for Shell's Singapore energy and chemical park will continue to work at CAPGC after the project is completed."

Two sources indicated that Glencore expects to supply crude oil product to Aster's refinery starting in February next year. One person mentioned that the trading company is already looking for cargo to arrive in that month.

Glencore declined to comment on its crude oil product procurement plan for the refinery, while Chandra Asri and ADNOC did not respond to requests for comment.

According to data from ship tracking company Kpler, the refinery has imported about 0.13 million barrels of crude oil product per day so far this year, mainly from Qatar, Saudi Arabia, the UAE, and Iraq's sour crude oil, as well as some low-sulfur crude oil from Brazil, the usa, Brunei, and Malaysia.

Two of the sources stated that for the products produced by the refinery, Shell's Shell Eastern Trading Company (SIETCO) will sign a two-year agreement with Aster to purchase 20% of the output of refined fuels such as gasoline, diesel, and jet fuel.

Sources mentioned that this will meet the fuel demand at the company's service stations in Singapore.

Shell previously stated that it has signed a crude oil product supply and product purchase agreement with CAPGC but did not provide specific details.

The third source indicated that Glencore's purchase of refined fuel products will be subject to the sales agreement between the trader and Aster.

Data from Kpler shows that in 2022 and 2023, the average annual export volume of jet fuel and diesel from the Wugong Island refinery was about 6.8 million barrels.

According to one source, for petrochemical products, Chandra Asri is considering integrating its naphtha procurement from cracking facilities in indonesia, thailand, and singapore, while concentrating on sales of certain petrochemical products.