NEW YORK, Oct 18 (Reuters) - Royal Dutch Shell plc has retained Deutsche Bank to sell its Martinez, California refinery, according to three people familiar with the matter.
Shell is in the midst of a three-year, $30 billion divestment plan following the company’s purchase of BG Group earlier this year.
A Shell spokesman said the company would not comment on “rumor or speculation.” Deutsche Bank declined to comment.
The refinery, located 30 miles (48 km) northeast of San Francisco, has been operating since 1915. It can process about 165,000 barrels of crude oil daily into gasoline, jet fuel, diesel and other refined products. It has a coker unit used for processing heavy grades of crude.
The potential sale would also include a pipeline that brings crude produced in California’s San Joaquin Valley to the refinery.
One source familiar said the plant could be valued at about $900 million. Parsippany, New Jersey-based PBF Energy paid $537.5 million, plus working capital costs, for a comparably-sized refinery in Torrance, California, which it bought from Exxon Mobil Corp earlier this year.
Shell is entering into confidentiality agreements with buyers who may be interested in reviewing the plant’s data ahead of a sale, the people said. PBF is a potential bidder, the people said, citing the company’s interest in California as indicated by its purchase of the Torrance refinery.
PBF has sustained interest in the state at a time when many refiners have tried to cut exposure to its regulatory regime, the people said. Exxon and BP have already divested their refineries in California and Shell previously sold one plant in the state to Tesoro Corp. Valero Energy Corp had previously retained a banker to seek a buyer for its California refineries, but ultimately kept the plants.
PBF did not comment on the Martinez plant, but executives said in the company’s most-recent earnings call that there are plans to continue to grow by acquisition.
While those looking to acquire energy assets are often required to enter into confidentiality agreements with sellers, Shell put additional constraints on the Martinez process by barring potential bidders from retaining their own advisers during the first round of bidding.
A sale of the Martinez plant would leave Shell with a single, wholly-owned U.S. refinery in Anacortes, Washington, though it has several joint ventures in the U.S. Gulf. (Reporting By Jessica Resnick-Ault; Editing by Alan Crosby)