29 March 2011 15:34 [Source: ICIS news]
The agreement follows Essar’s formal offer from February to acquire the refinery near Ellesmere Port, Cheshire.
The deal includes oil products and chemicals manufacturing and rights to certain distribution terminal assets, as well as commercial bulk fuels and local marine fuels businesses associated with the refinery.
Not included are Shell’s higher olefins plant and alcohols units at Stanlow, a lubricant oils blending plant and Shell’s lubricants marketing business.
Also excluded are Shell's UK retail sites; its aviation operations at airports; Shell's non-local marine business; marine lubricants; Shell's commercial road transport marketing businesses; its bitumen marketing business, and its technology centre at
The companies expect to complete the transaction in the second half of 2011.
Shell said the total consideration for the deal was expected to be $1.3bn.
Essar said the purchase price for the refinery would be $350m. On completion, it would make a separate payment for crude oil, refined products and other inventory at the Stanlow refinery site, it said. In February, Essar estimated that payment at about $780m.
Mark Williams, Shell’s downstream director, said: “The decision to sell Stanlow is part of our drive to concentrate our global manufacturing portfolio on larger assets and, on completion, means we will have reduced our global refining exposure through a combination of asset sales and closures by a total of 1.6m barrels since 2002.”
Last year, Shell sold its Heide refinery near
The Stanlow refinery employs 960 people. It is the UK’s second-largest oil refinery, producing around one-sixth of the UK’s petrol. Overall, Stanlow accounts for around 15% of production from
In related news this month, Valero agreed to acquire Chevron’s 220,000 bbl/day UK Pembroke refinery and related assets in a $730m cash deal. On completion, Valero will also acquire working capital and inventories valued at about $1bn.
($1 = €0.71)
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