Petroleum refiner HollyFrontier has signed an agreement with a subsidiary of Royal Dutch Shell to acquire its Puget Sound Refinery in the US, for $350m.
The acquisition also includes an on-site cogeneration facility and related logistics assets of the refinery.
HollyFrontier has entered into an agreement with Equilon Enterprises d/b/a Shell Oil Products US for the acquisition.
The sale is part of Shell’s strategy to reduce its global refinery footprint.
The deal amount will also comprise hydrocarbon inventory, which will be valued at the closing of the transaction with an estimated current value in the range of $150-180m.
Shell’s manufacturing EVP Robin Mooldijk said: “This is another step towards reshaping our refining portfolio to drive resilient returns.
“HollyFrontier is a strong operator and we believe they will continue the refinery’s legacy of prioritizing safety, environmental performance and care for people at the site and within the community.”
Located on approximately 850 acres in Anacortes, Washington, the refinery currently has a capacity to process approximately 149,000 barrels per day of crude oil.
The Puget Sound Refinery produces multiple types of gasoline in addition to fuel oil, diesel fuel, propane, jet fuel, butane and petroleum coke.
HollyFrontier anticipates to fund the refinery acquisition through a one-year suspension of its regular quarterly dividend and cash on hand.
The transaction is expected to be completed in the fourth quarter of 2021, subject to regulatory clearance and other customary closing conditions.
The sales also includes a deep-water marine dock, a light product loading rack, a rail terminal, and storage tanks with approximately 5.8 million barrels of crude, product and other hydrocarbon storage capacity.
Product offtake agreements in support of Shell’s existing retail marketing business in the Pacific Northwest are also part of the acquisition.
HollyFrontier president and CEO Mike Jennings said: “We are excited to announce the acquisition of the Puget Sound Refinery, an asset with a strong record of financial and operational performance.
“We believe that the Puget Sound Refinery will complement our existing refining business, with sales into premium product markets and advantaged access to Canadian crude.
“We are committed to the continued safe and environmentally responsible operations of the facility and welcome Puget Sound’s highly skilled workforce to the HollyFrontier family.”
