Vertex Energy to acquire Shell's Mobile, Alabama refinery
Royal Dutch Shell is selling its 90,000 barrel-per-day (bpd) Mobile, Alabama refinery to specialty refiner Vertex Energy for $75 million plus the cost of hydrocarbon inventory, the company said.
Vertex plans to produce petroleum fuel and renewable diesel at the refinery following the close of the transaction in the fourth quarter of 2021, pending approvals.
Shares of Texas-based Vertex surged more than 40% in after-market trading after the deal was announced.
Vertex will also buy co-related logistics infrastructure and hydrocarbon inventory, including more than 3 million barrels of crude oil and product storage. The inventory is currently valued between $65 and $85 million, Shell said.
Shell and Vertex will have crude supply and product offtake agreements, according to the companies.
Vertex plans to produce approximately 10,000 bpd of renewable diesel and renewable byproducts at the plant by the end of 2022, increasing to 14,000 bpd by 2023.
The company said it will spend $85 million to convert Mobile's hydrocracking unit.
Shell is shrinking its refining and chemicals portfolio as part of a broader shift by oil majors to reduce hydrocarbon emissions and shift to lower-carbon fuels.
Earlier this week Shell agreed to sell its controlling interest in a Texas refinery to partner Petroleos Mexicanos (Pemex) for about $596 million.
In early May Shell announced the sale of its 149,000 barrel per day (bpd) refinery in Washington to Hollyfrontier Corp. (Reporting by Laura Sanicola; editing by Richard Pullin)
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