Shell is considering selling its chemicals assets in Europe and the US, a move that could attract private equity firms looking to expand in the sector.

The UK-based energy giant has enlisted Morgan Stanley to conduct a strategic review of its chemicals operations, signaling a potential shift in its portfolio, according to The Wall Street Journal.

While discussions remain in the early stages, Shell’s Deer Park facility in Texas is reportedly among the assets under review. The company’s renewed focus on oil, gas, and biofuels could create an opportunity for private equity firms known for acquiring carve-outs from large corporations. The chemicals sector, with its high-margin potential and strong industrial demand, remains a key target for buyout firms and sovereign wealth funds.

Middle Eastern investors, which have been expanding their footprint in Western markets, could also be among the bidders. If Shell proceeds with a sale, it would align with CEO Wael Sawan’s cost-cutting strategy, which aims to streamline the company’s operations and focus on its most profitable segments.

Shell has been systematically divesting non-core assets, including last year’s sale of its refining and chemicals hub in Singapore. The Deer Park facility, located next to a refinery Shell sold to Mexico’s Pemex, could be next in line. The company has also been pulling back from offshore wind and restructuring its power division, moving away from renewables that were once central to its energy transition strategy.

Private equity firms have increasingly acquired refineries, midstream infrastructure, and renewables projects as energy companies recalibrate their portfolios. The chemicals sector, despite its cyclical nature, remains an attractive long-term investment, making Shell’s potential divestment a compelling opportunity for buyout firms.