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Shell plans to split Motiva assets with Saudi Aramco in Q2

Shell plans to split Motiva assets with Saudi Aramco in Q2

Feb 07, 2017
3 min read
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Shell Oil Co, the U.S. unit of Royal Dutch Shell Plc RDSa.L, said on Monday it expects to divide the refineries and other assets of the Motiva Enterprises joint venture with co-owner Saudi Aramco in the second quarter of 2017, according to Reuters.

"We are pleased with the progress we have made to date, and anticipate completion of the transaction in Q2 2017," Shell spokesman Ray Fisher told Reuters. "The April 1 date is a target that the internal project teams are working toward."

Rumors have swirled through U.S. refined products markets that the split would be delayed until the fall.

Shell and Saudi Aramco said in March 2016 they would divide up the 20-year-old joint venture, which operates three refineries, including the United States' largest, on the Gulf Coast.

Originally, the two companies targeted October 2016 for the split of assets, including pipelines and terminals as well as the refineries.

The major sticking point, sources told Reuters, was Shell's demand for a $2 billion payment as part of the breakup.

Shell chief executive officer Ben Van Beurden has pledged to raise $30 billion from divestments to help maintain dividends and recover some of the cost of buying BG Group Plc., while Aramco, the world’s biggest oil producer, is preparing for an IPO next year that could value the firm at over $2 trillion.

Under the plan for the division of assets, Saudi Aramco will retain the Motiva name and take ownership of the largest U.S. refinery in Port Arthur, Texas, which pumps 603,000-barrel-per-day (bpd), along with 26 terminals and exclusive license to sell fuel under the Shell brand across Texas and much of the U.S. Midwest and Southeast.

Shell is slated to become sole owner of two Louisiana refineries with a combined capacity of 472,700 bpd and Shell-branded gasoline stations in Florida, Louisiana and the U.S. Northeast.

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