Essar Energy acquires Shell's Stanlow refinery for $350 mn

Essar Energy Plc has acquired Shell's Stanlow Refinery for $350 million in cash. Stanlow Refinery is the second-largest refinery in the UK and will provide Essar a direct access in that market. It is expected that the acquisition will be completed during the second half of 2011.

According to a company release, Essar Energy Plc, through its indirect wholly owned subsidiary, has entered into an asset purchase agreement with Shell UK to acquire the oil refinery and other associated assets at Stanlow, near Ellesmere Port, Cheshire from Shell for a consideration of $350 million in cash.

Acquisition of the Stanlow Refinery, which is the second-largest refinery in the UK, will give Essar Energy direct access to the UK market, added the release.

“We are very pleased to have agreed this transaction with Shell. Stanlow is a high quality refinery and is an excellent fit with our strategy. We look forward to taking ownership of Stanlow in due course and making operational improvements, which will enhance production and better optimise the facility,” said Naresh Nayyar,  chief executive, Essar Energy.

A separate payment will be made for the crude oil, refined products and certain other inventory on the Stanlow Refinery site. This will be determined by prevailing market prices at the time when the transaction is completed and will be at cost.