Saudi Arabian Oil Co.’s (Saudi Aramco) wholly owned subsidiary Saudi Refining Inc. (SRI) and Royal Dutch Shell Plc (NYSE: RDS.A), through its U.S. downstream affiliate, said March 16 that the companies signed a non-binding letter of intent (LOI) to divide the assets of Motiva Enterprises LLC.
In the proposed division of assets, SRI will retain the Motiva name, assume sole ownership of the Port Arthur, Texas, refinery and retain 26 distribution terminals.
Shell will assume sole ownership of the Norco, La., refinery where it operates a chemicals plant, the Convent, La., refinery, nine distribution terminals and Shell-branded markets in Florida, Louisiana and the Northeast region.
“Motiva’s performance has transformed in the last two years. 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 strategies to provide simpler and more highly integrated businesses which deliver increased cash and returns,” John Abbott, Shell’s downstream director, was quoted as saying.
“Saudi Aramco subsidiaries and affiliates have had a presence in the U.S. for over 60 years, and the Motiva joint venture with Shell has served our downstream business objectives very well for many years,” Abdulrahman F. al-Wuhaib, senior vice president of downstream at Saudi Aramco, said in a prepared statement.
“However, it is now time for the partners to pursue their independent downstream goals. 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,” al-Wuhaib continued.
“Motiva’s employees will continue to be critical to fulfilling our future growth potential in the Americas, reinforcing our reliable customer service and supporting the communities where we operate. We fully support Motiva’s continuing transformation journey to become an autonomous integrated downstream affiliate,” al-Wuhaib said.
“Motiva has benefited greatly from the nearly two decades of support and resources provided by Shell and Saudi Aramco. While the parties work toward definitive agreements, Motiva will remain focused on our growth agenda, running operations in a safe, environmentally sound and efficient manner while continuing to reliably serve our customers,” Dan Romasko, Motiva’s president and CEO, said.
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