Shell will sell 100% stake in the Mobile refinery in Alabama

Royal Dutch Shell has agreed to offload its Mobile refinery in Alabama, US to specialty refiner Vertex Energy.

A deal has been signed between Equilon Enterprises LLC d/b/a Shell Oil Products US, Shell Oil Company, and Shell Chemical LP.

Vertex Energy will purchase Shell’s 100%-owned Mobile refinery and associated co-located logistics infrastructure, including product racks, an associated dock, and the Blakeley Island Terminal.

The deal consideration includes $75m along with the cost of the hydrocarbon inventory.

The transaction forms part of Shell’s broader plan to cut down its refinery footprint and transform them into high-value energy and chemicals parks that will generate more low-carbon fuels.

Located near the US Gulf Coast, at the north end of Mobile Bay in Alabama, the 90,000 barrel-per-day (bpd) Mobile refinery is equipped to produce LPG, diesel fuel, jet fuel and gasoline, among others.

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The deal is pending regulatory clearance, with completion expected in the fourth quarter of this year.

At the refinery, Vertex plans to produce about 10,000bpd of renewable diesel and renewable byproducts. Plans are on to increase the capacity to 14,000bpd by 2023.

Vertex president and CEO Benjamin P Cowart said: “The acquisition of the Mobile refinery will be the largest, most significant transaction ever completed by Vertex, one that positions us to become a leading regional supplier of both renewable and conventional products.

“Not only will this project fundamentally transform the profitability profile of the Mobile refinery, it also positions Vertex to further its objective of developing high-purity refined products and alternative feedstocks that support the global transition toward low-carbon energy alternatives.”

The deal comes days after Shell signed an agreement to divest its interest in the Deer Park refinery in the US to partner Pemex for $596m.