Shell, Aramco finalize separation of Motiva assets

May 15, 2017

Saudi Aramco and Royal Dutch Shell PLC have completed their previously announced transaction to divide up assets, liabilities, and businesses of their US-based refining and marketing joint venture Motiva Enterprises LLC (OGJ Online, Mar. 7, 2017).

Finalized on May 1, the transaction follows Aramco subsidiary Saudi Refining Inc. (SRI) and Shell US downstream affiliate SOPC Holdings East LLC’s Mar. 6 signing of binding definitive agreements to end the partnership, Shell said.

Shell now holds 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).

Additionally, Shell remains owner of 11 distribution terminals as well as Shell-branded markets in Alabama, Mississippi, Tennessee, Louisiana, a portion of the Florida Panhandle, and the US Northeast, all of which are now fully integrated with Shell’s North American downstream business, the company said.

Alongside retaining 24 distribution terminals and the Motiva name, SRI has taken 100% ownership of the 600,000-b/d Port Arthur, Tex., refinery and maintains 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.

After announcing the final separation agreement in March, the companies said the deal also was to include a $2.2-billion balancing payment from Shell to Aramco that, subject to adjustments including for working capital, was to 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.

To reduce the cash portion of the balancing payment, however, Shell also planned to assume $100 million of Motiva’s total net debt, which as of yearend 2016 stood at $3.2 billion.

Contact Robert Brelsford at rbrelsford@ogjonline.com.