Indian group Essar Energy is set to buy Royal Dutch Shell's UK refinery.
The Indian conglomerate has signed an exclusivity agreement for Shell's 296,000b/d Stanlow refinery in the North West of England. Currently the site employs some 1,800 full and part time workers and has a history of strong union activity.
The agreement to buy the refinery is worth £215m ($350m). A further deal, estimated at £478m ($780m will include the purchase of base oil, refined products and chemicals which will then be sold back to Shell under contracts of up to 10 years for some products. This will ensure the sale of at least 50-60% of the site's output will be guaranteed for Essar during that period.
The deal does not included Stanlow's lubricant oils blending plants and Shell will continue to market its own-brand lubricants products in the UK.
There is still time for Essar to re-consider its offer, with a $50m break clause in place if it chooses not to confirm by 31st March. Shell then has three days to accept the deal or pay a $10m penalty if it backs away.