Shell Singapore ethylene unit shutdown has limited naphtha impact

Royal Dutch Shell has shut an ethylene cracker in Singapore.
Royal Dutch Shell has shut an ethylene cracker in Singapore.PHOTO: BLOOMBERG

SINGAPORE (REUTERS) - Royal Dutch Shell has shut an ethylene cracker in Singapore but traders said on Thursday that there would be limited impact on the naphtha market which has been trending up this week.

Traders added that they did not expect the petrochemical unit, which uses naphtha and other feedstock including liquefied petroleum gas (LPG), to be shut for a prolonged period. "The cracker glitch should be rather minor and more importantly, the unit does not purely feed on naphtha," said a Singapore-based source.

Shell shut the cracker, which produces over 900,000 tonnes of ethylene a year, located at Pulau Bukom mid-week following a glitch.

The cracker shutdown came after a refinery unit located at the same site was hit by a fire in August.

Shell did not immediately respond to the operational issues at the cracker when contacted.

On Aug. 21, a section of an unidentified unit at Shell's refinery which was undergoing maintenance was hit by a fire.

About a month later, Singapore issued a stop work order on a fire-hit unit at the 500,000 barrels per day refinery.

Asia's naphtha crack, the premium of refining one barrel of crude into the petrochemical feedstock, was at 2-1/2 month high of US$94.38 a tonne on Thursday.