Shell plc is considering selling its chemicals assets in Europe and the United States, the Wall Street Journal reported March 2, citing sources familiar with the matter.
The energy group hired Morgan Stanley to conduct a strategic review of its chemicals operations, the WSJ said.
Potential buyers may include private equity firms and Middle Eastern entities seeking to expand capacity in the west, the report added.
In the U.S., Shell operates chemical complexes in Deer Park, Texas, Geismar and Norco, La., and Monaca, Pa., where it says it stabilized production in 2024.
At the time, Shell said it was working on its cost structure to bring down overhead at Monaca, which produces low and high density polyethylene. It said the moves would lead to Shell increasing chemical volumes by 6 percent year-on-year to 11.9 million metric tons in 2024. When it opened in 2022, it was the first major U.S. resin operation built outside of Texas or Louisiana in more than 40 years.
In Europe, it operates chemical complexes in Rheinland, Germany, Moerdijk, Netherlands; and Mossmoran, United Kingdom.
Shell has posted annual losses in its chemical segment for the last three years. In 2024, it generated sales of $9.6 billion, flat with 2023. The segment recorded a loss of $392 million, an improvement from the $717 million loss in 2023.
Shell's 2024 annual report said that its European ethylene capacity is 1.71 million metric tons per year. Its U.S. ethylene capacity is 3.82 million metric tons per year.
Shell has been under a "strategic review" since 2023, including assessment and potential divestiture of assets and limits to future investments in Singapore and Europe.
The energy and petrochemical group plans to expand its chemical operations in China through its joint venture with CNOOC Oil & Petrochemicals Co. Ltd. at Daya Bay, near Huizhou.
"The expansion will include a third ethylene cracker with a planned capacity of 1.6 million tons per year of ethylene and associated downstream derivatives units producing chemicals including linear alpha olefins," it said in a Jan. 15 news release.
This investment also includes a new facility, which will produce 320,000 tons per year of specialty chemicals, such as polycarbonates and carbonate solvents, it said.