The Stanlow refinery, which is situated near Ellesmere Port, Cheshire in northeast England, has a capacity of 272,000 barrel-per-day.
Essar Energy’s deal value of $1.13bn consists of $780m for the inventory with the UK refinery.
Shell agreed in principle to the offer made by Essar Energy and has granted exclusivity to the offer until 1 April 2011 under which break fees will be payable if either company fails to sign an asset sales agreement.
The proposed sale of the assets is be expected to be completed by mid 2011.
The two companies will also sign an exclusive five-year crude supply contract under which Essar will buy crude and feedstock exclusively from Shell for a five-year period for Stanlow refinery.
In addition, the companies will enter into long-term agreements for the supply of refined products in the UK by Essar to Shell.
