Equilon Enterprises LLC, doing business as Shell Oil Products US (Shell), a subsidiary of Royal Dutch Shell, has formally closed on the sale of Shell’s Martinez Refinery in California.
The refinery was sold to PBF Holding Company LLC (PBF), a subsidiary of PBF Energy Inc., in exchange for $1.2 billion, which includes the refinery and inventory. The deal also includes crude oil supply and product offtake agreements and other adjustments.
Shell is very proud of the relationship it has built and maintained with the city and people of Martinez, Calif., over the many years it has operated side by side with the Martinez community making several notable achievements on safety, reliability, performance and community involvement.
As Shell turns over ownership of the Martinez Refinery to PBF, the company offers many thanks to the city and community of Martinez, Calif., for all they have done to support and partner with Shell and its employees over the last 100 years.
The transaction covered the sale of Shell’s Martinez Refinery and adjacent truck rack and terminal in California. Shell’s associated branded fuel businesses, Aviation terminal, and Catalysts business in the area were not part of this transaction. All regulatory requirements were met prior to the closing of this divestment.
As part of the sale, Shell and PBF entered into crude supply and product offtake agreements to continue to supply Shell branded businesses ensuring that Shell customers will continue to have access to quality Shell branded fuels.
Local employees providing dedicated support to Shell’s Martinez Refinery were all offered employment with PBF.
PBF Energy and Shell have agreed to jointly move forward with reviewing the feasibility of building a proposed renewable diesel project which would repurpose existing idled equipment at the Martinez refinery to create a renewable fuels production facility. The detailed feasibility review and planning for this project is expected to continue after deal closing.
Shell will maintain a significant presence in California with continued investments in its Upstream and New Energies business. This divestment aligns with Shell’s strategy to reshape refining efforts towards a smaller, smarter refining portfolio focused on further integration with Shell Trading hubs, chemicals and marketing.
By 2025, Shell expects to have interests in a smaller, core set of refineries. A key advantage of these core sites will come from further integration with Shell trading hubs, and from producing more chemicals and other products resilient in a lower-carbon future, such as bitumen and base oils. Its focus is value rather than volume. The company will invest in its core refineries to enable them to deliver resilient returns.