Shell plans to hang on to Norco, Louisiana refinery -sources

A Shell logo is seen at a gas station in Buenos Aires, Argentina, March 12, 2018. REUTERS/Marcos Brindicci

HOUSTON, June 30 (Reuters) - By the end of 2021, Royal Dutch Shell Plc (RDSa.L) will have just one operating crude oil refinery in the United States: The 227,400 barrel-per-day (bpd) refinery in Norco, Louisiana.

Sources familiar with Shell’s plans say the company will likely hang on to the Norco refinery because of its role supplying the company’s chemical plants.

“Norco is integrated with them,” one of the sources said of the refinery, 25 miles (40 km) west of New Orleans.

In addition to producing gasoline, diesel and jet fuel, the Norco refinery produces ethylene and propylene that go to the adjoining Shell Norco chemical plant and to the nearby Shell Geismar, Louisiana, plant.

A Shell spokesman did not reply to a request for comment.

In May, Shell announced the sales of its Anacortes, Washington, refinery as well as the controlling interest in the joint-venture Deer Park, Texas, refinery. The company also sold its chemical refinery in Mobile, Alabama.

All three sales are to close in the fourth quarter of 2021. Shell’s shift out of refining to emphasize petrochemical production anticipates a fall in demand for fuels refined from crude oil as motor vehicles shift away from carbon-intensive fuels.

As early as 2014, Shell identified Norco’s gasoline-producing fluidic catalytic cracker (FCC) as the more profitable at two Louisiana refineries then operated by the Motiva partnership between Shell and Saudi Aramco (2222.SE).

The partnership split in 2017 with Shell keeping the Norco and Convent refineries in Louisiana.

Shell shut the Convent refinery in December after overhauling the FCC in 2018. Shell has configured the shut Convent refinery for a possible sale or restart, the company has said.

Reporting by Erwin Seba; Editing by Kirsten Donovan

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