MOSCOW (MRC) -- Total has agreed to sell its 108,000 b/d Lindsey refinery in the UK to fuel trading and marketing Prax Group, as the French oil major focuses on its integrated downstream assets and the coronavirus adds to the uncertainty over long-term demand for fuel, reported S&P Global.
Located in North Killingholme, Lincolnshire, the 52-year-old plant is the smallest of the UK's four operating refineries and sources most of its crude from the North Sea.
For UK-based independent Prax, the deal will boost the scale of its existing fuel supply and retailing operations through its subsidiary Harvest Energy, securing local supplies for its growing independent fuel dealerships business.
The deal includes the Fina line pipeline which links the refinery with the Buncefield fuel terminal and the Killingholme loading terminal. No financial details of the deal were given.
Lindsey is Total's last remaining downstream asset in the UK after the major sold off its retail fuel network to a consortium led by independent service station operator Snax 24 and Shell in 2011.
Total, Europe's largest refiner, said the sale of the plant was in line with its downstream strategy of focusing investment only its integrated refining and petrochemical assets.
"Since the sale of our British retail network in 2011, the Lindsey refinery hasn't been part of Total's downstream system," Total said. "It will be put to better use within the Prax Group; an independent player with a growing UK network."
Total first began looking to sell the Lindsey refinery in 2010 but shelved the plans two years later after failing to find a buyer. In 2016, the plant's nameplate capacity was halved from 220,000 b/d after one of the two crude distillation units was shut down.
European refiners, which have been suffering from structural overcapacity in the region for years, have also been forced to reconsider the future of some plants due to the impact of coronavirus on fuel demand. Most market watchers don't expect global oil demand to recovery fully before 2022, and many predict the pandemic has permanently weakened the world's oil demand trajectory.
Shell recently relaunched the sale of its Fredericia refinery in Denmark after suspending the sale in 2018 and in June Gunvor said it is considering whether to mothball its Antwerp site.
Harvest Energy was ranked the UK's fifth independent fuel group by the UK's Forecourt Trader last year with 88 sites trading under the Harvest Energy, BP, Essar, Esso, Gulf, Jet, Shell and Texaco brands.
Total is already supplying fuel to Harvest under a deal signed in November to develop a network of Total-branded service stations under a fuel supply and partnership.
The Lindsey sale should be finalized by the end of the year once the conditions of the sale have been satisfied, Total said.
As MRC informed before, Total has recently disclosed that it is evaluating construction of a new gas cracker at its Deasan, South Korea, joint venture (JV) with Hanwha Chemical.
Ethylene and propylene are feedstocks for producing polyethylene (PE) and polypropylene (PP).
According to MRC's DataScope report, PE imports to Russia dropped in January-June 2020 by 7% year on year to 328,000 tonnes. High density polyethylene (HDPE) accounted for the main decrease in imports. At the same time, PP imports into Russia rose in the first six months of 2020 by 21% year on year to 105,300 tonnes. Propylene homopolymer (homopolymer PP) accounted for the main increase in imports.
Total S.A. is a French multinational oil and gas company and one of the six "Supermajor" oil companies in the world with business in Europe, the United States, the Middle East and Asia. The company's petrochemical products cover two main groups: base chemicals and the consumer polymers (polyethylene, polypropylene and polystyrene) that are derived from them.
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