Shell's talks with Essar on sale of German refineries stall

02 July 2010 17:27  [Source: ICIS news]

TORONTO (ICIS news)--Shell’s attempt to sell two refineries in northern Germany to India’s Essar has not yet succeeded and the company is now talking to other potential investors, a spokesperson said on Friday.

The company has been trying to sell the refineries near Hamburg for about 15 months.

Shell had for some time only talked to Essar to sell the two German refineries, as well as its Stanlow refinery in the UK, in “one package”, Cornelia Wolber, a spokesperson for Shell’s offices in Hamburg, told ICIS news.

However, an exclusivity agreement with Essar had now expired and Shell was talking to other investors who may be interested in all or some of the refining sites, she said.

Nevertheless, Essar remained a potential buyer, Wolber said. A German media report claiming that talks with Essar had failed was not correct, she said.

Shell’s focus continued to be on selling the refineries, rather than closing them down permanently or converting them to fuel terminals, Wolber said.

Shell had said earlier it may close the facilities if no buyer could be found. Last month, the company said that it would convert its refinery in Montreal, Canada, to a fuel terminal after talks with potential buyers failed.

The regional governments of the Hamburg city state and of Schleswig-Holstein have committed to helping Shell find buyers to ensure that the facilities, which employ over 1,000 workers in total, continue operatering.

Shell’s refinery in Heide, Schleswig-Holstein, has a processing capacity of 4.5m tonnes/year, producing fuels and petrochemicals products. Shell also produces ethylene, propylene, benzene, toluene, xylenes at Heide, according to its website.

The refinery in Hamburg-Harburg has a processing refinery of 5.5m tonnes/year. It produces fuels, base oils and waxes.

In related news, independent Switzerland-based refiner Petroplus said earlier this year it was considering selling its 85,000 bbl/day Reichstett refinery near Strasbourg in France.

Developments that affect the operating scale of Europe's refining sector have an impact on the region's petrochemicals production.

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By: Stefan Baumgarten
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