Saudi Aramco and Royal Dutch Shell PLC have agreed to move forward on a previously announced plan to divide up assets, liabilities, and businesses of their US-based refining and marketing joint venture Motiva Enterprises LLC, which operates three refineries at the US Gulf Coast (OGJ Online, Mar. 16, 2016).
Aramco subsidiary Saudi Refining Inc. (SRI) and Shell’s US downstream affiliate SOPC Holdings East LLC signed binding definitive agreements to end the partnership on Mar. 6, Motiva and Shell said in separate statements.
Scheduled to close during this year’s second quarter, the deal includes a $2.2-billion balancing payment from Shell to Aramco that, subject to adjustments including for working capital, will be satisfied by a combination of SRI assuming more than its 50% share of Motiva’s net debt as well as a planned $1.5-billion cash payment for the remaining balance, Shell said.
To reduce the cash portion of the balancing payment, however, Shell said it will assume $100 million of Motiva’s total net debt, which as of yearend 2016 stood at $3.2 billion.
Breakup details
As part of the revised agreement, SRI will retain the Motiva name, assume 100% ownership of the 600,000-b/d Port Arthur, Tex., refinery, retain 24 distribution terminals, as well as maintain an exclusive, long-term license to use the Shell brand for gasoline and diesel sales in Georgia, North Carolina, South Carolina, Virginia, Maryland, Washington, DC, the eastern half of Texas, and most of Florida.
In exchange, Shell will assume sole ownership of the 235,000-b/d Norco refinery—where subsidiary Shell Chemical LP already operates a petrochemical plant—and the 242,250-b/d Convent refinery, which Motiva previously announced will be integrated to create the Louisiana Refining System (OGJ Online, Aug. 12, 2016).
Shell also will retain 11 distribution terminals as well as Shell-branded markets in Alabama, Mississippi, Tennessee, Louisiana, a portion of the Florida panhandle, and the US Northeast.
Contact Robert Brelsford at [email protected].
