The shutdown will occur this month as Shell failed to find a viable buyer. Credit: Nautical9.

Royal Dutch Shell has reportedly announced that it is closing its refinery in Convent, Louisiana, US.

According to Reuters, the refinery is the largest of its kind in the US and first on the Gulf Coast to shut down as the Covid-19 pandemic takes a toll on worldwide demand.

Shell Convent refinery is located adjacent to the Mississippi River, between Baton Rouge and New Orleans.

It is designed to process about 240,000 barrels per day (bpd) of crude oil, producing conventional petroleum products as well as refinery grade sulfur.

The shutdown will occur this month as the company failed to find a viable buyer.

In an emailed statement, Shell spokesman Curtis Smith said: “After looking at all aspects of our business, including financial performance, we made the difficult decision to shut down the site.”

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Upon the completion of the shutdown, Shell will continue its efforts in trying to divest the refinery, the company said.

In its quarterly earnings call this week, Shell told its investors that it expects to sell six refineries and chemical plants globally.

The company also revealed its plans to close facilities that it cannot sell.

Shell chief financial officer Jessica Uhl stated: “We recognise the market is not great at the moment in terms of divesting assets. If it’s not possible, we’ll consider closing and shutting down. That’s ultimately the last option we’d like to pull.”

The refinery joins the eight other refineries in North America that are ‘targeted for a shutdown or to be idled’ since the Covid-19 pandemic dents global demand for refined products.

In February, Equilon Enterprises concluded the $1.2bn divestment of the Martinez Refinery in California to PBF Energy subsidiary PBF Holding on behalf of Shell Oil Products US.