LONDON, March 29 (Reuters) - Essar Energy said on Tuesday it has agreed to buy the UK's second largest refinery in northwest England from Royal Dutch Shell for $350 million.
The agreed price tag was in line with previous expectations, although the total cost will mount to an estimated $1.3 billion including remaining oil inventories, Shell said.
The decision by Essar Energy, which has a majority stake in India-listed Essar Oil, followed Chinese oil giant PetroChina's purchase of the Scottish Grangemouth refinery owned by INEOS.
'We will be investing in operational improvements to enhance production,' Essar said in a statement.
'Stanlow has been running at only about 225,000 barrels a day, which is 75 percent of its capacity of 296,000 bpd.'
Many European oil firms have been looking to sell refining assets since 2009 as a sharp fall in demand squeezed refining margins.
At one point, about a dozen of refineries were put up for sale. Some of them, including Total's Lindsey refinery in the U.K, have remained unsold.
(Reporting by Sarah Young; writing by Emma Farge; editing by Ikuko Kurahone) Keywords: ESSAR STANLOW (emma.farge@thomsonreuters.com; +44(0)20 7542 5387; Reuters Messaging: emma.farge.reuters.com@reuters.net) COPYRIGHT Copyright Thomson Reuters 2011. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
The agreed price tag was in line with previous expectations, although the total cost will mount to an estimated $1.3 billion including remaining oil inventories, Shell said.
The decision by Essar Energy, which has a majority stake in India-listed Essar Oil, followed Chinese oil giant PetroChina's purchase of the Scottish Grangemouth refinery owned by INEOS.
'We will be investing in operational improvements to enhance production,' Essar said in a statement.
'Stanlow has been running at only about 225,000 barrels a day, which is 75 percent of its capacity of 296,000 bpd.'
Many European oil firms have been looking to sell refining assets since 2009 as a sharp fall in demand squeezed refining margins.
At one point, about a dozen of refineries were put up for sale. Some of them, including Total's Lindsey refinery in the U.K, have remained unsold.
(Reporting by Sarah Young; writing by Emma Farge; editing by Ikuko Kurahone) Keywords: ESSAR STANLOW (emma.farge@thomsonreuters.com; +44(0)20 7542 5387; Reuters Messaging: emma.farge.reuters.com@reuters.net) COPYRIGHT Copyright Thomson Reuters 2011. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
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