Shell agrees £800m deal to sell Stanlow
THE £800m sale of Stanlow oil refinery in Cheshire has moved a step closer.
Stanlow’s owner, oil giant Shell, has received an offer from Essar Energy, an Mauritius-baed group operating mostly in India, worth around $1.3bn.
The parties have signed an exclusivity agreement until April 1, and a deal is expected to be completed by the middle of the year.
Stanlow near Ellesmere Port is the country’s second biggest oil refinery. It produces 272,000 barrel-per-day and employs 960 people.
In a statement Shell said: “Pursuing this deal is aligned with Shell’s strategy to concentrate its global manufacturing portfolio on larger and more sophisticated assets.
“In addition to the proposed sale of the assets, which would be expected to close by mid 2011, the two companies would enter into an exclusive five year crude supply contract by Shell to Essar and into long-term agreements for the supply of products in the UK by Essar to Shell.”
The deal will give Essar, which is listed on the London Stock Market, its first asset in the UK. The dea; will see it pay £219m ($350m) for the plant and a further £480, ($780m) for crude oil, refined products and other stock on the Stanlow site.
Naresh Nayyar, Essar Energy’s chief executive, said: “We are very pleased to have reached an agreement regarding Stanlow, which is a high quality refinery in terms of its employees, its assets, its location and its customer base.”
He went on: “After completion, we look forward to working closely with the refinery management and employees to develop the business and we will be investing in operational improvements to optimise the facility and enhance production.”
The company said the purchase of Stanlow, which will still be subject to shareholder and regulatory approval, will give Essar the option of exporting from its Vadinar refinery in India.
