Tuesday, 30 November, 2021

Shell to build Asia’s largest pyrolysis oil upgrader unit

NEW YORK: Energy giant Shell Eastern Petroleum on Tuesday announced that it will be building a new pyrolysis oil upgrader unit, an investment that will support the growth of “plastic waste to chemicals” industry in the region.

The unit, which is set to start production in 2023, will be located at Shell’s manufacturing site on offshore island Pulau Bukom, said the company in a press statement, report agencies.

Speaking to reporters at the ground-breaking ceremony for the new unit on Tuesday, Aw Kah Peng, chairman of Shell Companies in Singapore, declined to comment on Shell’s investment amount, citing commercial sensitivity.

The unit will be the largest in Asia and Shell’s first such unit globally, with a capacity of 50,000 tonnes per annum. This is equivalent to the weight of about 7.8 billion plastic bags.

The new unit will improve the quality of pyrolysis oil, a liquid that is made from hard-to-recycle plastic waste that would have otherwise gone into a landfill, and turn it into chemical feedstock for the company’s plants.

Shell will then use the treated pyrolysis oil to produce circular chemicals that are utilised in everyday products such as tyres, mattresses, furniture and cars.

The company said the move is a response to “growing customer demand”. Shell has already signed its first circular chemicals agreement in Asia with chemicals company Asahi Kasei.

Aw stressed that the starting point for energy companies like Shell is no longer just crude oil, amid the ongoing global transition towards cleaner forms of energy.

She added that Shell Singapore is now looking at “other sustainable fuels” such as animal fats and used cooking oil, which can be turned into low-carbon fuels that include sustainable aviation fuel, renewable diesel for road transport or renewable chemicals.

This “upgrade” to sustainable fuels will cost Shell Singapore more, but the company is hoping that at some point, customers will be willing to pay a premium for these alternatives.

Minister for Trade and Industry Gan Kim Yong, who officiated at the ground-breaking ceremony for the new unit, said that “constant evolution and the pursuit of excellence” have allowed Singapore’s energy and chemicals sector to transform from its humble beginnings as an oil storage facility to a “vibrant and competitive cluster of chemical plants”.

“Shell’s plans to transform its business in Singapore and become a net-zero emissions energy business are very much aligned with our vision for the energy and chemicals sector,” he added.

Gan also said the government is looking to transform Jurong Island - which is widely known as the heart of Singapore’s chemical and energy industry - into a “sustainable energy and chemicals park”.