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June 26, 2008

Shell cuts refining capacity of units in Singapore, Malaysia
Royal Dutch Shell has shut around 250,000 barrels per day (bpd) of refining capacity
in Singapore and Malaysia for regular maintenance at a time of healthy demand for
motor fuels, reported Reuters.

Shell Singapore brought down its second-largest crude distillation unit (CDU) at the
Bukom Island refinery this week for a three-week maintenance, a refinery source
said.

Refinery sources had told Reuters in early-May that the 115,000-130,000 barrels per
day (bpd) No.4 CDU would be shut down, together with a gasoline-making platforming
unit, for maintenance from early-June.

They had also said a hydrotreater, a unit that produces mainly ultra-low sulphur
diesel and jet fuel, would start a one-month turnaround around June 24.

Shell's Singapore refinery has a total capacity of 500,000 bpd and has two other CDUs.

When contacted, a Shell Singapore spokeswoman said: "It is our policy not to discuss
maintenance schedules.

"Equipment maintenance is planned well in advance, regularly reviewed and
coordinated with our needs to supply customers and to keep our equipment running in
a safe manner."

Shell had also shut its 125,000-bpd refinery at Port Dickson on Malaysia's west
coast for regular maintenance, the company said on Wednesday. A refinery source said
the shutdown started on June 17 and will be for 45 days.

While Shell Malaysia mostly supplies the domestic market, Shell's Singapore refinery
is export-oriented and the maintenance work comes at a time when a demand spike for
diesel from Australia has tightened the regional market.

A gas plant explosion off Western Australia in early June had caused fuel shortages
to miners there, triggering a scramble to import 330,000 tonnes of diesel from the
region so far.

News of Shell's maintenance plans in Singapore and Malaysia, together with
additional diesel shipments to Australia reported earlier this week, had pushed
Asian gas oil cracks against Dubai crude to a four-session high of $36.30 a barrel
on Wednesday.


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