EXCLUSIVE Mitsubishi looks to sell California products terminal and trading arm

The signboard of Mitsubishi Corp is pictured  at its head office in Tokyo
The signboard of Mitsubishi Corp is pictured at its head office in Tokyo, Japan August 2, 2017. REUTERS/Kim Kyung-Hoon

Dec 1 (Reuters) - Mitsubishi Corp (8058.T) is looking to sell a fuel terminal that provides transportation fuels which meet California's stringent emissions requirements, two sources familiar with the matter told Reuters on Wednesday.

The company is working with Ernst and Young's energy advisory group to market its 600,000-barrel Petro-Diamond terminal in Long Beach, California, and its corresponding fuel trading division, the sources said.

Mitsubishi is seeking either a joint venture partner for Petro-Diamond or an outright sale, the sources added.

The terminal is the only U.S. refined products asset owned by Mitsubishi, Japan's biggest trading house by sales.

Mitsubishi previously had a sizable trading operation in Singapore, also named Petro-Diamond (PDS). The company began winding down in 2020 after it said a PDS trader had lost $320 million in unauthorized transactions in crude oil derivatives.

Mitsubishi could still scrap the sale of the U.S. terminal if it fails to find a suitable buyer, they said. A target valuation for Petro-Diamond could not be determined.

EY and Mitsubishi did not return requests for comment.

PetroDiamond was formed in 1983 and markets and distributes on-spec transportation fuels in Southern California including CARB gasoline, low sulfur diesel, ethanol and marine fuels.

Last year, an executive order required that by 2035 all new cars and passenger trucks sold in California be zero-emission vehicles, and that the state reduce the dirtiest forms of oil extraction.

Royal Dutch Shell Plc (RDSa.L) has been looking for a buyer for Aera, its California-based oil and gas-producing joint venture with Exxon Mobil Corp (XOM.N), Reuters reported in July.

Reporting by Laura Sanicola and Shariq Khan; Editing by Richard Chang

Our Standards: The Thomson Reuters Trust Principles.

Thomson Reuters

Shariq reports on energy markets with a focus on US physical refined products and global financial oil markets. He is a regular contributor to energy M&A and corporate moves at top shale companies including oil majors and top oil focused private equity firms. He was nominated for 2020 Reuters journalist of the year for exclusive coverage of mass layoffs and bankruptcies in the shale patch during the peak of the COVID-19 pandemic. Shariq graduated in journalism and holds six years of experience covering energy equities and markets. Contact: 918884014512

Thomson Reuters

Reports on oil and energy, including refineries, markets and renewable fuels. Previously worked at Euromoney Institutional Investor and CNN.