Shell Sells Washington Refinery

Shell Sells Washington Refinery
Royal Dutch Shell's (NYSE: RDS.A) subsidiary, Equilon Enterprises LLC d/b/a Shell Oil Products U.S., has reached an agreement for the sale of its Puget Sound Refinery near Anacortes, Washington.

Royal Dutch Shell’s (NYSE: RDS.A) subsidiary, Equilon Enterprises LLC d/b/a Shell Oil Products U.S., has reached an agreement for the sale of its Puget Sound Refinery near Anacortes, Washington.

The refinery is being sold to a subsidiary of HollyFrontier Corporation, an independent refiner headquartered in Texas, for $350 million in cash, plus the value of the hydrocarbon inventory. This inventory will be valued at closing based on actual volumes and prevailing market prices, although its current value is said to range from $150 million to $180 million.

The deal covers the sale of Shell’s Puget Sound Refinery, the on-site cogeneration facility, and the associated logistics infrastructure, as well as the product offtake agreements in support of Shell’s existing retail marketing business in the Pacific Northwest. Shell’s off-site logistics assets are excluded from the deal.

Shell’s latest transaction is expected to close in the fourth quarter of this year, subject to regulatory clearance and other customary closing conditions. All employees providing dedicated support to Shell’s Puget Sound Refinery will be offered employment with HollyFrontier.

“This is another step towards reshaping our refining portfolio to drive resilient returns,” Robin Mooldijk, Shell’s EVP for manufacturing, said in a company statement.

“HollyFrontier is a strong operator and we believe they will continue the refinery’s legacy of prioritizing safety, environmental performance, and care for people at the site and within the community,” Mooldijk added in the statement.

Puget Sound Refinery is currently designed to process approximately 149,000 barrels per day of crude oil. The refinery produces multiple types of gasoline in addition to fuel oil, diesel fuel, propane, jet fuel, butane, and petroleum coke.

Last month, Shell’s subsidiary QGC Common Facilities Company Pty Ltd, announced it had completed the sale of a 26.25 percent interest in the Queensland Curtis LNG Common Facilities to Global Infrastructure Partners Australia for $2.5 billion. During the same month, Shell Egypt and one of its affiliates signed a deal with a consortium to sell Shell’s upstream assets in Egypt’s Western Desert for a base consideration of $646 million and additional payments of up to $280 million between 2021 and 2024.

In February, through its affiliate Shell Canada Energy, Shell reached an agreement with publicly listed Canadian energy company Crescent Point Energy Corp. to sell its Duvernay shale light oil position in Alberta, Canada, for a total consideration of $707 million. In January, the Shell Petroleum Development Company of Nigeria Limited, completed the sale of its 30 percent interest in Oil Mining Lease (OML) 17 in the Eastern Niger Delta, and associated infrastructure, to TNOG Oil and Gas Limited for a consideration of $533 million.

To contact the author, email andreas.exarheas@rigzone.com



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