Shell has reached a conditional agreement with Malaysian Hengyuan International Limited (MHIL) for the sale of its 51% shareholding in the Shell Refining Company (SRC) in Malaysia for US$66.3m. SRC operates a 156,000 bbl/d (7.8 Mt/year) refinery in Port Dickson, where a 31,000 bbl/d diesel processing unit was commissioned in 2013.
MHIL is a unit of Chinese private refiner Shandong Hengyuan Petrochemical Company. The company will invest in the upgrades needed to meet the Euro 4M and Euro 5 requirements. The transaction is expected to complete in 2016, subject to obtaining regulatory approval.
The sale is consistent with Shell’s strategy to concentrate its global Downstream footprint and businesses where it can be most competitive. Other recent Downstream divestments include the sale of Downstream businesses in Australia and Italy; a number of retail sites in the UK; and the initial public offering of, and further drop downs to, Shell Midstream Partners L.P. Shell has also agreed the sale of its marketing business in Denmark and Norway, its LPG businesses in France and a 33.24% shareholding in Showa Shell Sekiyu KK.
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