Chandra Asri expects as much as $13.5 billion in additional annual revenue from Singapore
SINGAPORE – Indonesia’s Chandra Asri Group is confident that its deal with global oil giant Shell to buy its refining complex in Singapore will be an accretive move, citing operational synergies and a growing demand for fuels and petrochemicals in the region.
Chandra Asri expects US$8 billion to US$10 billion in annual revenue from SECP. Industry experts, however, are not too enthusiastic about the outlook for refining margins in Asia, where most refiners import feedstock from the Middle East. Refining margins refer to the profit from turning a barrel of crude oil into petroleum products.
“Chemical makers will face challenging markets again in 2024 as weak economic growth and oversupply weigh on prospects,” he added.However, Wood Mackenzie had predicted strong buying interest in SECP if the buyer is looking for immediate geographical diversification and supply chain expansion. While Indonesia is an oil and gas producer, it faces a continuing shortage of refined fuels and chemicals like many other fast-growing Asean nations.
The group currently operates Indonesia’s sole naphtha cracker, which can produce ethylene and propylene – basic raw materials that are further processed at the complex into other petrochemicals.
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