MOSCOW (MRC) -- Royal Dutch Shell agreed to sell its controlling interest in a Texas refinery to partner Petroleos Mexicanos (Pemex) for about USD596 million, the latest move by the European oil major to cut its global refining footprint, reporte Reuters.
The deal ends a 28-year partnership between Shell and Pemex, Mexico's state-run oil company that processed up to 340,000 barrels per day of oil into gasoline and diesel. The deal was significantly revamped three years ago in a move to halve its purchases of Mexican crude beginning in 2023.
Mexican President Andres Manuel Lopez Obrador had complained this month the Deer Park, Texas, joint venture had not been profitable for Mexico, and said he was committed to "addressing this issue" without providing details.
In a tweet on Monday, Obrador praised the buyout that makes Pemex the refinery's sole owner and gives it the first ownership of a plant outside of Mexico. The refinery, shipping docks and an adjacent chemical plant that Shell will retain ownership covers 2,300 acres outside of Houston. Neither Obrador, nor the announcement of the sale indicated whether Pemex or another company would operate the US plant.
Shell will retain control of the chemical plant that adjoins the 318,000-bpd Deer Park, Texas, refinery that sits along the Houston Ship Channel.
The sale comes as Shell is shrinking its refining and chemicals portfolio as part of a broader shift by oil majors to reduce their hydrocarbon footprint and shift to lower-carbon fuels.
As MRC wrote before, on May 4, Shell disclosed plans to sell its 149,000-bpd Puget Sound refinery in Anacortes, Washington, to US refiner HollyFrontier as part of the European company"s strategy to reduce its global refinery footprint.
We remind that in November 2020, Royal Dutch Shell plc. also said that its petrochemical complex of several billion dollars in Western Pennsylvania was about 70% complete and in the process to enter service in the early 2020s. The plant's costs are estimated to be USD6-USD10 billion, where ethane will be transformed into plastic feedstock. The facility is equipped to produce 1.5 million metric tons per year (mmty) of ethylene and 1.6 mmty of polyethylene (PE), two important constituents of plastics.
Ethylene and propylene are the main feedstocks for the production of polyethylene (PE) and polypropylene (PP), respectively.
According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 576,270 tonnes in the first three month of 2021, up by 4% year on year. Low density polyethylene (LDPE) and high density polyethylene (HDPE) shipments increased. At the same time, PP shipments to the Russian market totalled 410,890 tonnes in January-March 2021, up by 56% year on year. Supply of homopolymer PP and PP block copolymers increased.
Royal Dutch Shell plc is an Anglo-Dutch multinational oil and gas company headquartered in The Hague, Netherlands and with its registered office in London, United Kingdom. It is the biggest company in the world in terms of revenue and one of the six oil and gas "supermajors". Shell is vertically integrated and is active in every area of the oil and gas industry, including exploration and production, refining, distribution and marketing, petrochemicals, power generation and trading.