Shell Oil Products has completed the $75 million sale of its Chemical LP Refinery in Mobile to Houston-based Vertex Energy. The deal also includes $25 million in capital expenditures and about $165 million for hydrocarbon inventory.
The purchase agreement for the 91,000-barrel-per-day refinery was announced in 2021 and finalized this week.
In addition to the refinery, the deal includes 3.2 million barrels of storage, a dock and Shell’s Blakely Island terminal.
“The acquisition of the Mobile refinery represents a transformative moment in the history of Vertex, one that positions us to become a leading regional supplier of both renewable and conventional products,” stated Benjamin P. Cowart, president and CEO of Vertex. “As previously disclosed, we intend to complete the planned conversion of the Mobile refinery’s hydrocracking unit by year-end 2022, positioning us to commence production of renewable diesel fuel at the site beginning in the first quarter 2023.”
Coward added, “As we look out to the remainder of 2022, we expect refined product margins on conventional fuels production at the Mobile refinery to remain at elevated levels, given strong regional demand conditions, while our legacy assets continue to benefit from favorable product spreads. Entering 2023, we intend to layer on the financial benefit of renewable diesel fuel production which, given current commodity prices and credit values, will position us to deliver significant value to our shareholders.”
The 914-acre site in Saraland, just north of Mobile, processes foreign and domestic crude oil into heavy olefin, liquid petroleum gases, gasoline, jet fuel and other products. Shell purchased the site in 1996 from Louisiana Land & Exploration Co., which opened the site in 1975.
Shell will continue to have crude supply and product offtake agreements with Vertex to support Shell customers on the U.S. Gulf Coast.
