Shell to sell Bakersfield refinery

Jan. 11, 2005
Shell Oil Products US has signed an agreement to sell its 70,000 b/d refinery to a subsidiary of Flying J Inc.

By OGJ editors

HOUSTON, Jan. 11 -- Shell Oil Products US has signed an agreement to sell its 70,000 b/d refinery to a subsidiary of Flying J Inc. The sale will replace controversial plans to close the refinery in March (OGJ Online, Dec. 7, 2004).

After regulatory approvals, the sale is to be finalized in first quarter 2005. Terms of the sale were not disclosed. Shell's plans to close the refinery had encountered resistance from Californian political leaders concerned about product supply.

The refinery, which began operation in 1932 as the 1,500 b/d Mohawk Refinery in California's Central Valley, will be operated by Shell until the ownership transfer is complete.

Shell will continue to own and operate certain pipelines serving the refinery. Also, it will continue to own the nearby Bakersfield Products Terminal, but Flying J will operate it under a long-term lease. Shell will have an offtake agreement to receive products from Flying J and will continue to meet its supply obligations to branded customers and contracted diesel customers in the Central Valley through the Bakersfield Products Terminal and its West Coast supply network.

Flying J is an oil product marketer in the US West. Its wholly owned subsidiary Big West Oil LLC operates a 25,000 b/d refinery in North Salt Lake, Utah.