Israel’s Delek keen on Shell Montreal refinery

20 July 2010 23:39  [Source: ICIS news]

TORONTO (ICIS news)--Delek US Holdings, an arm of Israel’s diversified Delek Group, is interested in acquiring Shell’s 130,000 bbl/day refinery in Montreal, officials said on Tuesday.

Shell said last month it would permanently close the refinery later this year and convert it into a fuel terminal after an 11-month effort to find a buyer had failed. Base oil and wax production had already ended at the refinery, it said.

Jim Boles, business development executive for Delek US Holdings, told a Canadian parliamentary committee in a webcast hearing that this company “continued to be interested” in the refinery.

The committee inquired into Shell’s decision to close the refinery - which employed a staff of around 500 workers - rather than sell it.

However, Boles said that Delek would not be interested in buying a closed refinery, without employees and immediate markets.

Shell executive Richard Oblath told the committee his company had tried hard to sell the refinery without success. The refinery would require significant investment to make it competitive, he added.

Delek said it had earlier evaluated the Montreal refinery but was currently not in negotiations with Shell.

However, Canadian media reported that Oblath told reporters after the hearing that Shell was still interested in selling the refinery to Delek - for a price of around Canadian dollar (C$) 150m-$200m ($143m-$190m)

Delek US operates a 60,000 bbl/day refinery in Tyler, Texas. It also holds a 34.6% interest in Lion Oil Company, a privately held 75,000 bbl/day refinery in El Dorado, Arkansas.

($1 = C$1.05)

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By: Stefan Baumgarten
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