UNOCAL COMPLETES PURCHASE OF PART OF SHELL REFINERY
Unocal Corp.'s Union Oil Co. of California has completed the purchase of a substantial portion of Shell Oil Co.'s refinery in Carson, Calif.
Unocal last week assumed operation of Shell's Wilmington site, one of the two refinery sites Shell operated in Carson.
Unocal acquired the 125,000 b/d crude unit, a coker, a gas oil hydrotreater, and sulfur plants, assorted storage tanks, and other equipment at the site.
Shell retained the lubricants compounding plant at the Wilmington site.
Unocal will operate the Shell site and its Los Angeles refinery in Wilmington, Calif., as a single unit.
The Los Angeles refinery will be designated the Unocal Wilmington plant, and the former Shell facilities will be called the Unocal Carson plant.
UNOCAL BENEFITS
"This acquisition provides significant benefits to Unocal, making us one of the lowest cost refiners," said Richard J. Stegemeier, Unocal chairman, president, and chief executive officer.
"We will significantly lower our crude oil costs," Stegemeier said. "In addition, the hydrotreater and coker will enable Unocal to convert 85% of its raw material input to gasoline, jet fuel, diesel, and low sulfur gas oil, compared with a 77% conversion rate today.
"The result will be significantly improved refining margins."
He said the addition of a hydrotreater enhances Unocal's capability to produce reformulated gasolines and eliminates the need to build its own hydrotreating plant. In September, Unocal suspended engineering, procurement and construction work on a hydrotreater project at its Los Angeles refinery.
OTHER ELEMENTS
Unocal also acquired Shell's interest in the Pier E marine terminal at Long Beach Harbor.
In addition, the companies agreed that Unocal will purchase Los Angeles basin and San Joaquin Valley heavy crude oil from Shell, allowing Unocal to back out purchases of higher cost-Alaska North Slope and imported crudes. Unocal plans to shut down its 108,000 b/d crude units and associated visbreaker units at the Wilmington plant in first quarter 1992.
Unocal hired about 100 Shell employees to operate the Carson plant. Shutdown of crude units at the Wilmington plant will not result in layoffs there.
The companies did not disclose financial terms of the deal.
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