Equilon Enterprises LLC d/b/a Shell Oil Products US (Shell), a subsidiary of Royal Dutch Shell plc reached an agreement for the sale of Shell’s Martinez Refinery in California to PBF Holding Company LLC, a subsidiary of PBF Energy, Inc., for $1.0 billion consideration plus the value of hydrocarbon inventory, crude oil supply and product offtake agreements, and other adjustments.
This divestment aligns with Shell’s strategy to reshape refining efforts towards a smaller, smarter refining portfolio focused on further integration with Shell Trading hubs, Chemicals, and Marketing.
The transaction is subject to closing conditions and regulatory approvals and is expected to close in 2019.
Martinez is a high-conversion refinery capable of capturing heavy/sour differentials. It produces a high percentage of on-spec clean product including premium gasoline, diesel and jet fuel. Martinez has a refining capacity of 157,000 barrels per day and a Nelson Complexity Index of 16.1.
PBF Energy and Shell have agreed to move forward jointly with reviewing the feasibility of building a proposed renewable diesel project which would repurpose existing idled equipment at the Martinez refinery to create a renewable fuels production facility. The detailed feasibility review and planning for this project is expected to occur after closing of the acquisition.
Shell will maintain a significant presence in California with continued investments in its Upstream and New Energies business.