* Bukom's 500,000 bpd refining capacity to be halved
* Company to cut 500 jobs by the end of 2023
* Studying biofuels, bitumen, recycled chemical feedstock
(Adds Shell's total refining capacity cuts, analyst's comments)
By Aradhana Aravindan and Florence Tan
SINGAPORE, Nov 10 (Reuters) - Royal Dutch Shell
will halve crude processing capacity and cut jobs at its Pulau
Bukom oil refinery in Singapore as part of an overhaul to reduce
its carbon emissions.
The refinery on Pulau Bukom, a small island in the Southeast
Asian city-state, can process 500,000 barrels per day (bpd) of
oil and is Shell's largest wholly-owned refinery worldwide.
The move brings the total refining capacity cuts by Shell in
recent months to 571,000 bpd, or just over a fifth of its
capacity globally.
Shell aims to reduce the number of its refineries as part of
a drive to slash carbon dioxide (CO2) emissions to net zero by
2050 and restructure its operations by reducing its oil and gas
business and expanding its renewable energy and power division.
The coronavirus pandemic has destroyed fuel demand,
estimated at 4.7 million bpd less during the next five years,
and accelerated a rationalization of global refining capacity,
Rob Smith, director at consultancy IHS Markit, said.
"Rationalization that would have been spread out over the
coming decade will now be compressed within the next few years,"
he said.
"What was expected to be a long, slow adjustment has become
an abrupt shock."
More than 8 million bpd of new refining capacity will be
completed over the next decade, adding to the excess capacity
challenge, Smith said.
As part of the plans, Shell is cutting the number of oil
refining and petrochemical sites it will keep operating to six
from 14. Besides Pulau Bukom, the other sites are in Texas,
Louisiana, Germany, the Netherlands and Canada.
Shell has announced plans to convert its Philippines
refinery into an import terminal and shut its largest U.S.
facility in Convent, Louisiana.
In September, Shell said it planned to cut up to 9,000 jobs
globally, or more than 10% of its workforce.
"Bukom will pivot from a crude-oil, fuels-based product
slate towards new low-carbon value chains. We will reduce our
crude processing capacity by about half and aim to deliver a
significant reduction in CO2 emissions," Shell said in a
statement on Tuesday.
The company will cut 500 jobs by the end of 2023 at the
site, which now employs 1,300 staff, a Shell spokeswoman said.
"We will progressively make changes in our refinery
configuration over the next three years," she said.
In Singapore, Shell said it was studying the production of
products that would still be viable following its energy
transition, such as biofuels and specialities like bitumen.
It is also looking at using different raw materials, or
feedstocks, such as recycled chemicals. Shell operates a plant
at Bukom that produces 800,000 tonnes of ethylene a year.
In Singapore, Shell said it would expand its solar power
generation, including utility-scale plants, build electric
vehicle charging points, provide carbon-neutral solutions for
its customers and study plastic waste recycling.
Shell is also expecting its first bunkering ship for
liquefied natural gas (LNG) to arrive in Singapore later this
year. It will be operated by FueLNG, a joint venture with Keppel
Offshore & Marine.
(Reporting by Aradhana Aravindan, John Geddie and Florence Tan
in Singapore, Ron Bousso in London; Editing by Christian
Schmollinger, David Clarke and David Evans)
