Royal Dutch Shell Plc is selling its 90,000 bbl/d Mobile, Alabama refinery to specialty refiner Vertex Energy for $75 million-plus the cost of hydrocarbon inventory, the company said on May 26.

Vertex plans to produce petroleum fuel and renewable diesel at the refinery following the close of the transaction in the fourth quarter of 2021, pending approvals.

Shares of Houston-based Vertex surged more than 40% in after-market trading after the deal was announced.

Vertex will also buy co-related logistics infrastructure and hydrocarbon inventory, including more than 3 million barrels of crude oil and product storage. The inventory is currently valued between $65 million and $85 million, Shell said.

Shell and Vertex will have crude supply and product offtake agreements, according to the companies.

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Vertex plans to produce approximately 10,000 bbl/d of renewable diesel and renewable byproducts at the plant by the end of 2022, increasing to 14,000 bbl/d by 2023.

The company said it will spend $85 million to convert Mobile’s hydrocracking unit.

Shell is shrinking its refining and chemicals portfolio as part of a broader shift by oil majors to reduce hydrocarbon emissions and shift to lower-carbon fuels.

Earlier this week Shell agreed to sell its controlling interest in a Texas refinery to partner Petroleos Mexicanos (Pemex) for about $596 million.

In early May, Shell announced the sale of its 149,000 bbl/d refinery in Washington to Hollyfrontier Corp.