Saudi Aramco will take sole ownership of the nation’s largest oil refinery in Port Arthur within the next three months.
Royal Dutch Shell and state-owned Saudi Armco announced late Monday they’ve successfully negotiated the dissolution of their two-decade joint venture, Houston-based Motiva Enterprises, which owns three refineries in Texas and Louisiana, including the massive Port Arthur Refinery.
The deal was delayed for months after Shell and Aramco struggled to finalize the details. They announced last year they planned to break up the Motiva marriage.
Aramco subsidiary, Saudi Refining Inc., will own the 600,000-barrel-a-day Port Arthur Refinery, while Shell gets the Convent and Norco refineries in Louisiana, both of which combine to process less than 500,000 barrels daily.
Aramco will pay Shell $2.2 billion as part of the deal, including $700 million in cash and the assumption of additional Motiva debt.
The deal is expected to close in the second quarter.
The Saudis will maintain the rights to the Motiva Enterprises brand, as well as 24 distribution terminals, including exclusive rights to sell Shell-branded gasoline in eastern Texas, Georgia, North Carolina, South Carolina, Virginia, Maryland, Washington D.C. and most of Floria.
Shell keeps 11 terminals and Shell-branded markets in Louisiana, Alabama, Mississippi, Tennessee, the Florida Panhandle and the northeastern U.S.
Saudi Arabia also is seeking to grow in Texas petrochemicals and plastics. The Saudi Basic Industries Corp., called Sabic, has a joint venture with Exxon Mobil to develop a $10 billion chemicals and plastic complex that’s tentatively slated for a site north of Corpus Christi.