By OGJ editors
HOUSTON, May 1 -- A subsidiary of Flint Hills Resources LLC, Wichita, Kan., has agreed to buy Shell Oil Co.'s 50% ownership interest in Excel Paralube, the name of both the joint venture with ConocoPhillips and the name of a Group II base oil plant.
The plant, adjacent to the ConocoPhillips' refinery near Lake Charles, La., is capable of producing 21,000 b/d of high-quality lubricating hydrocracker base oils. ConocoPhillips holds 50% interest in the plant.
Flint Hills Resources Pres. and CEO Dave Robertson called the acquisition "a natural extension of our existing refining business activities, and Excel is well positioned in the base oil market."
Terms of the sale were not released. The US Federal Trade Commission must approve the sale before the deal can be closed.
A wholly owned member of the Royal Dutch/Shell Group, Shell Oil acquired its stake in Excel Paralube when it bought Pennzoil-Quaker State Co. last year. Under an FTC consent order on the Shell-Pennzoil transaction, Shell agreed to sell its interest in Excel Paralube to a commission-approved buyer (OGJ Online, Sept. 30, 2002).
If the FTC had not stepped in, Shell would have controlled at least 39% of Group II refining capacity in the US and Canadaraising concerns about reduced competition and possibly higher prices for Group II base oil in the US and Canada, the commission said.