Shell has agreed to sell its Martinez Refinery in California

Equilon Enterprises d/b/a Shell Oil Products US has signed a $1bn agreement for the sale of the Martinez refinery in California to PBF Holding, a subsidiary of PBF Energy.

The divestment is part of Shell’s strategy to modify refining efforts towards a smarter refining portfolio which is focused on further amalgamation with Shell Trading hubs, Chemicals, and Marketing.

Shell downstream director John Abbott said: “This deal is another step in our transformation to high-grade and optimise our portfolio to drive resilient returns.”

The deal comprises the sale of Shell’s 157,000bpd Martinez refinery and on-site logistics assets, including a deepwater marine facility, product distribution terminals, and refinery crude and product storage facilities with an 8.8 million barrel shell capacity.

The Martinez high-conversion refinery produces premium gasoline, diesel and jet fuel.

Shell and PBF will enter crude supply and product offtake agreements to ensure that the former’s customers will continue to have access to quality Shell-branded fuels.

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Upon the close of the transaction, Shell’s Goal Zero safety programme will remain its highest priority.

The employees providing support to the Martinez refinery will be offered jobs with PBF, as part of the agreement.

“This deal is another step in our transformation to high-grade and optimise our portfolio to drive resilient returns.”

PBF Energy and Shell have agreed to move forward with reviewing the feasibility of building a planned renewable diesel project to repurpose existing idled equipment at the Martinez refinery and create a renewable fuels production facility.

The detailed feasibility review and planning for the renewable diesel project will be initiated after the completion of the transaction.

Expected to close this year, the transaction is, however, subject to customary closing conditions and other regulatory approvals.