MOSCOW (MRC) -- A national security review has delayed the sale of Royal Dutch Shell's controlling interest in a Texas refinery to Mexico's national oil company Petroleos Mexicanos (Pemex), said Hydrocarbonprocessing.
Shell in May disclosed a sale of its 50% interest in the 302,800 bpd Deer Park, Texas, refinery outside Houston to partner Pemex for about USD596 MM. Approval by the powerful federal Committee on Foreign Investment in the United States (CFIUS) is last hurdle to transfer full control of the Texas refinery to Pemex, said people familiar with the matter.
Pemex did not immediately reply to a request for comment. A spokesperson for CFIUS declined to comment."There's no new closing date," one of the people familiar with the matter said. "Could be next week. Could be early next year."
U.S. Representative Brian Babin, a Republican representing southeast Texas, in June said he had "significant concerns" about the deal and called upon U.S. Treasury and Energy departments to do a full review of the sale.
"This transaction creates a tangible public health and environmental risk to the Texas residents who work at and live in proximity to the Deer Park facility, as well as an economic risk to those with a stake in the financial well-being of the company," Babin wrote in a letter to two departments. Babin said he was "not confident Pemex has the corporate wherewithal to operate such a facility in the United States," according to his June 21 letter to Treasury Secretary Janet Yellen and Energy Secretary Jennifer Granholm.
Under the sale agreement announced in May, Shell will retain control of its the Deer Park facility's chemical plant and the company will have only one refinery in the United States, the 230,611-bpd plant in Norco, Louisiana.
As MRC informed previously, Royal Dutch Shell plc. said in November that its petrochemical complex of several billion dollars in Western Pennsylvania is about 70% complete and in the process to enter service in the early 2020s. The plant's costs are estimated to be USD6-USD10 billion, where ethane will be transformed into plastic feedstock. The facility is equipped to produce 1.5 million metric tons per year (mmty) of ethylene and 1.6 mmty of polyethylene (PE), two important constituents of plastics.
Ethylene and propylene are feedstocks for producing PE and polypropylene (PP).
According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 1,868,160 tonnes in the first nine months of 2021, up by 18% year on year. Shipments of all grades of ethylene polymers increased. At the same time, PP shipments to the Russian market were 1,138,510 tonnes in January-September 2021, up by 30% year on year. Supply of propylene homopolymer (homopolymer PP) and block-copolymers of propylene (PP block copolymers) increased, whereas supply of injection moulding statistical copolymers of propylene (PP random copolymers) decreased significantly.
Royal Dutch Shell plc is an Anglo-Dutch multinational oil and gas company headquartered in The Hague, Netherlands and with its registered office in London, United Kingdom. It is the biggest company in the world in terms of revenue and one of the six oil and gas "supermajors". Shell is vertically integrated and is active in every area of the oil and gas industry, including exploration and production, refining, distribution and marketing, petrochemicals, power generation and trading.
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