Oil giants Saudi Aramco and Royal Dutch Shell have signed a letter of intent (LoI) to divide the assets of Motiva, the refining and marketing joint venture (JV) in Houston, Texas, US.
The Motiva JV was formed in 1998 and has operated as a 50/50 refining and marketing JV between the companies since 2002.
Under the LoI, Saudi Aramco will retain the Motiva name and assume complete ownership of the 600,000 barrels per day Port Arthur refinery in Texas.
The company will retain 26 distribution terminals and have a licence to use the Shell brand for gasoline, as well as diesel sales in Texas.
Shell will assume sole ownership of the 230,000 barrels per day Convent refinery and 235,000 barrels per day Norco refinery in St Charles Parish, Louisiana.
Shell downstream director John Abbott said: "We propose to combine the assets we will retain from the joint venture with Shell’s other downstream assets in North America.
"This is consistent with both the group and downstream strategy to provide simpler and more highly integrated businesses, which deliver increased cash and returns."
Saudi Aramco downstream senior vice-president Abdulrahman Al-Wuhaib said: "Saudi Aramco subsidiaries and affiliates have had a presence in the US for over 60 years, and the Motiva joint venture with Shell has served our downstream business objectives very well for many years.
"The Port Arthur refinery will advance Saudi Aramco’s global downstream integration strategy through supply and trading, refining and fuels marketing, chemicals and base oils."
The companies will further evaluate options and select a deal structure to formalise an agreement to divide and transfer the assets and liabilities of the JV.
Image: The headquarters of Shell in The Hague, Netherlands. Photo: courtesy of PL van Till.
