THE HAGUE, Netherlands – In a step that marks a major milestone toward closing the transaction for the full ownership of Motiva Enterprises LLC, Royal Dutch Shell PLC has signed binding definitive agreements with SOPC Holdings East LLC and Saudi Refining Inc. on the separation of assets, liabilities and businesses of the refining and marketing joint venture.
Saudi Refining will assume full ownership of Motiva, including the refinery at Port Arthur, Texas, and 24 distribution terminals. Motiva will have the right to exclusively sell Shell-branded gasoline and diesel in Georgia, North Carolina, South Carolina, Virginia, Maryland and Washington, D.C., as well as the eastern half of Texas and most of Florida.
Shell will assume sole ownership of the Norco, La., refinery, the Convent, La., refinery, 11 distribution terminals, and Shell-branded markets in Alabama, Mississippi, Tennessee, Louisiana, a portion of the Florida panhandle, and the northeastern United States. These assets will be fully integrated with Shell's downstream business in North America.
The parties have agreed on a balancing payment of $2.2 billion, subject to adjustments including for working capital. This value will be satisfied by a combination of SRI assuming more than its 50% share of Motiva's net debt on completion and a cash payment for the balance.
As at Dec. 31, 2016, Motiva's total net debt was $3.2 billion, of which Shell will assume $100 million, resulting in a deduction to the cash portion of the balancing payment of $1.5 billion.
The companies said that they expect the transaction, subject to regulatory approval, to close in the second quarter of 2017.
Based in Houston, Motiva refines, distributes and markets petroleum products. With three refineries in the U.S. Gulf Coast region, Motiva has a combined capacity of more than 1.1 million barrels per day. The company's marketing operations support a network of approximately 8,400 Shell-branded gas stations and convenience stores in the eastern and southern United States.
SOPC Holdings East is a U.S. downstream subsidiary of Shell, and Saudi Refining Inc. is a wholly owned subsidiary of Saudi Arabian Oil Co., Saudi Aramco.
Royal Dutch Shell, based in The Hague, Netherlands, is a global group of energy and petrochemical companies with operations in more than 70 countries. In the United States, Houston-based Shell operates in all 50 states.
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