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Shell to shut Singapore CDU, 2 more units in June


Reuters: UPDATE 1-Shell to shut Singapore CDU, 2 more units in June

Fri May 9, 2008 6:20am BST

(Adds market background, details, analyst comments)

SINGAPORE, May 9 (Reuters) – Royal Dutch Shell (RDSa.L: Quote, Profile, Research) will shut its second-largest crude distillation unit (CDU) and two secondary units at its Singapore refinery in June for routine maintenance lasting up to 30 days, refining sources said on Friday.

The shutdown of CDU No. 4, with a capacity of 115,000-130,000 barrels per day (bpd) on Bukom island, as well as a gasoline-making platforming unit, is expected to start in early June and run for about three weeks.

The turnaround on the hydrotreater, a unit that produces mainly ultra-low sulphur diesel and jet fuel, will start around June 24 and run for about one month, sources said.

The refinery has a total capacity of 500,000 bpd and has two other CDUs.

A Shell spokesman declined comment when contacted. The refiner does not normally comment on operational matters.

Analysts and traders said that the upcoming turnaround of the three units were expected to have limited impact on the major’s export programme.

“Since it’s a scheduled shutdown, it probably won’t have any impact on the market. They should be able to replace three weeks easily,” said Tony Regan of energy consultancy Nexant.

“They would’ve fine-tuned their stocks beforehand and arranged for imports as replacement,” he said.

About 90 percent of refined oil products from Shell’s mega-facility in Singapore are sold into regional markets.

Asia’s diesel supply and demand fundamentals have been easing in recent weeks, after cracks touched a record three weeks ago, as growing supply from South Korea and slowing demand in Indonesia and Vietnam weighed on sentiment.

But the market is still relatively tight, lifted by firm demand from China for diesel and jet fuel, with front-month gas oil cracks GO-1M-CK-A holding above $30 a barrel on Thursday, near the $34.81 record hit on April 17.

While Shell’s maintenance of the platforming unit should have little impact on Asian gasoline, the market is expected to tighten in coming weeks after a 83,000 bpd residual fluid catalytic cracking (RFCC) at Indonesia Pertamina’s Balongan facility went down due to an outage. [ID:nSP178303]

Eyes are also on strong Australian demand for gasoline in light of recent shutdowns and outages. The gasoline reforming margin GL92-SIN-DIF, or the premium that gasoline fetches to naphtha, was at high levels of $17.37 a barrel on Thursday.

The refiner’s Singapore facility, which is Shell’s largest refining centre by crude-processing capacity, shut its Long Residue Catalytic Cracker (LRCC) in end-September for more than three months following an outage.

At the time, Shell’s fuel oil supplies were most affected, as most of the product was drawn off the LRCC’s residues as well as from another unit, the 66,000-bpd thermal gas unit (TGU), which had been scheduled for a planned three-week turnaround in November. The TGU was restarted in early December. (Reporting by Luke Pachymuthu, Chua Baizhen and Seng Li Peng; Editing by Ramthan Hussain)

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