By the OGJ Online Staff
HOUSTON, Sept. 27 -- Shell Chemical Co., Houston, signed a letter of intent to buy a 77,000 b/d refinery in Yabucoa, Puerto Rico, from Sunoco Inc., Philadelphia.
Financial terms were not disclosed for the transaction, subject to completion of a due-diligence review along with other terms and conditions.
The refinery, located on 197 acres on the southeast coast of Puerto Rico, began operations in 1971 and produced primarily lube oils.
Shell Chemical plans to reconfigure the facility to produce feedstock, which will be moved by marine tanker to its chemical plants in Deer Park, Tex., and Norco, La. The Yabucoa facility also will produce gasoline, diesel, jet fuel, and residual fuels primarily for the Puerto Rican market, officials said.
"This acquisition fits very well with our existing operations in the US, and it allows us to grow the value of our business," said Bill Colquhuon, Shell's vice-president in charge of lower olefins.
Sunoco announced plans to sell the refinery early this year and at one time was negotiating a possible sale to an unnamed party (OGJ Online, Jan. 11, 2001). When that sale failed to materialize, Sunoco announced plans to close the refinery in May (OGJ Online, Mar. 21, 2001).
Company officials said at the time that the facility did not generate sufficient return on capital employed.
The two companies are working to complete the transaction by Jan. 1
