SINGAPORE - Shell said on Thursday night (June 6) that it has increased the storage capacity at its Singapore Bukom refinery by nearly 1.3 million barrels by building two large crude oil tanks.

By increasing storage capacity at Pulau Bukom, Shell will have greater flexibility in optimising its oil trading activities. The move is also to improve competitiveness through storage and logistics investment at its core refineries, due to expected increases in demand for oil products in the region and globally over the next two decades.

According to Shell, Singapore is its largest petrochemical production and export centre in the Asia-Pacific region. Similarly, it is also investing in storage and logistics for its other large, complex and integrated sites in Rotterdam and the US Gulf Coast.

Robin Mooldijk, executive vice-president for manufacturing at Shell, said the new facilities will allow Shell to buy more oil when market conditions are attractive.

"This project positions Shell to capture stronger margins and better manage market volatility over the coming years," he added.

Shell built the storage tanks using an automated welding technology, reducing welding time by 60 per cent and reducing costs.

This is not the first time Shell invested in storage capacity for its Singapore petrochemical complexes. In September 2018, it penned an agreement with privately owned Oiltanking Singapore Chemical Storage (OTSC) for the lease on two more propylene storage tanks on Jurong Island. OTSC is an independent storage provider that handles petrochemical products and runs a terminal on Jurong Island.

Pulau Bukom contains the company's largest wholly owned Shell refinery globally in terms of crude distillation capacity. It is also home to Shell's ethylene cracker complex, which saw its production capacity expand to one million tonnes a year, up from 800,000 tonnes, on a successful upgrading in 2015.