Shell has received a number of bids for parts of its US chemicals business, including from ExxonMobil, LyondellBasell, private equity firm Apollo Global Management and the chemicals arm of Kuwait Petroleum Corporation, according to the Financial Times.
The indicative and non-binding bids, submitted last month, cover both the entire business and individual pieces of it, and could collectively fetch up to USD 8 billion – much lower than the amount Shell has invested in the assets.
The portfolio spans four sites across Louisiana, Texas, and Pennsylvania, producing chemicals used in plastics, detergents and pharmaceuticals. The largest is the complex in Monaca, Pennsylvania, which started up in 2022 after an investment of USD 14 billion. It is designed to produce up to 1.6 million tonnes of polymers a year. Shell is separately marketing its European chemicals assets, though these are expected to fetch considerably less. No party involved has confirmed the process publicly, and there is no guarantee it results in a sale.
Wael Sawan, CEO of Shell, has repeatedly signalled that chemicals sit outside Shell’s core business. He has said the company has USD 45 billion of capital “underperforming,” split between chemicals and renewables, and that Shell does not see itself as a “natural owner” in the chemicals business. He also cautioned in February that Shell would “be patient” rather than sell into a weak cycle – a position this now-live sale process somewhat contradicts, even as a surge in prices tied to the war in the Middle East has pulled the chemicals unit back to profitability this year after a lossmaking stretch.
Shell is trimming its US footprint on another front too: it has listed its roughly 1.3-million-square-foot Houston Energy Corridor campus, acquired via the 2016 BG Group takeover, for around USD 325 million, with a sale-leaseback structure that would keep Shell operating from part of the site as a tenant rather than relocating. Marketed by Cushman & Wakefield, the listing fits the same cost-discipline pattern as the chemicals sale, following a second quarter in which Shell cut net debt from USD 52.6 billion to USD 41.75 billion and trimmed its quarterly buyback from USD 3.5 billion to USD 3 billion.
source: The Energy Year