Shell today confirmed the signing of binding definitive agreements between SOPC Holdings East, a US downstream subsidiary of Shell, and Saudi Refining Inc (SRI) on the separation of assets, liabilities and businesses of Motiva Enterprises, a 50/50 refining and marketing joint venture.
SRI is a a wholly owned subsidiary of Saudi Arabian Oil Company.
A Shell spokesperson said: “A balancing payment of $2.2billion has been agreed between the parties, subject to adjustments including for working capital. This value will be satisfied by a combination of SRI assuming more than its 50% share of Motiva’s net debt on completion and a cash payment for the balance.
“As at 31 December 2016, Motiva’s total net debt was $3.2billion, of which Shell will assume $0.1billion, resulting in a deduction to the cash portion of the balancing payment of $1.5billion. As a result of the transaction no material effect is expected on gearing reported on the Shell balance sheet.”
The refining assets from Motiva that will be owned and operated by Shell include the 230,000 barrel per day Convent refinery in St. James Parish, Louisiana and the 235,000 barrel per day Norco refinery, is located in St. Charles Parish, Louisiana.
The refining asset retained by Motiva is the 600,000 barrel per day Port Arthur refinery located in Port Arthur, Texas.
“Distribution terminals, retail assets, branded and commercial customer agreements have been divided by geography in a way to ensure each partner has an integrated and robust business”, according to a Shell spokesperson.
Motiva is headquartered in Houston, Texas. It refines, distributes and markets petroleum products. h three refineries in the U.S. Gulf Coast region, Motiva has a combined capacity of over 1.1 million barrels per day.
In the US, Shell operates in 50 states and employs more than 18,000 people.
The transaction is expected to close in the second quarter of 2017.
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