Malaysia's Petronas Dagangan and Royal Dutch/Shell Group affiliate Shell Malaysia Trading have agreed in principle to sell a combined 20% stake in petroleum distribution assets in Malaysia to Esso Malaysia Bhd., a unit of ExxonMobil Corp., for $31.68 million.
Petronas Dagangan and Shell Malaysia Trading each will sell a 10% stake in the Multi-Product Pipeline (MPP), the Klang Valley Distribution Terminal (KVDT), and associated facilities. The sale will leave each of the firms with a 40% stake in the 125.8-km pipeline system and the inland distribution terminal, commissioned in 1997.
Petronas Dagangan, a unit of Malaysian state oil giant Petronas, issued a statement to the Kuala Lumpur Stock Exchange (KLSE) detailing the plan.
The MPP transports petroleum products from Petronas's refinery in Melaka and Shell's refinery in Port Dickson to the KVDT and to Kuala Lumpur International Airport (KLIA) on the outskirts of the capital. Esso Malaysia, following a third-party agreement signed in June 1988, also uses the MPP to transport jet fuel from its refinery in Port Dickson to KLIA.
Petronas Dagangan said Esso Malaysia has started a due diligence exercise, and parties are discussing the terms and conditions for its participation. In a separate statement, Esso Malaysia said it had enough funds to finance the investment.
