Royal Dutch Shell is in exclusive talks with the Finnish fuel distributor St1 to sell the oil major's Swedish refinery, it has been announced.
The Gothenburg refinery has simple-to-medium complexity, allowing it to process low-sulphur light crude from the North Sea; but not high-sulphur crude.
With a processing capacity of about 78,000 barrels of crude oil per day, the refinery supplies the domestic market with specialist fuels, such as diesel that does not freeze in the cold Scandinavian climate.
Helsinki-based St1 operates six bioethanol plants in Finlandand runs 650 petrol stations across Scandinavia as well as in Poland—some of which it purchased from Statoil and ExxonMobil several years ago.
Analysts have suggested that the purchase would suit St1's business strategy, with the small size of the refinery making it relatively affordable.
Shell has been looking for buyers for many of its refineries in Europe as part of its strategy to divest about 15 per cent of its refining assets. Margins are expected to remain weak for an extended period in many developed countries, where demand has peaked.
If the two companies reach an agreement, it will be the second European refinery deal for Shell in a matter of weeks, following the sale of its German refinery in late August. Both are relatively small plants supplying local markets.
In June last year, Lukoil paid about $725 million to buy 45 per cent of the Dutch Vlissingen refinery, which is about three times as big as the Gothenburg plant.
The Grangemouth refinery in Scotland, which is connected to the North Sea Forties pipeline system, was reportedly offered to PetroChina for many billions of dollars.
