Shell Chemical Buys Yabucoa


Sunoco Inc. announced Thursday that it has agreed to sell its mothballed Yabucoa, Puerto Rico, base oil refinery to Shell Chemical.

The deal apparently means that Yabucoa’s 9,200-barrel-per-day capacity for Group II base oils will be removed from the market permanently.

Shell Chemical, a Houston-based subsidiary of the Royal Dutch/Shell Group, said it plans to use the plant to produce fuels, as well as feedstocks for chemical plants in the United States. Its the nail in the coffin of Yabucoa as a source of base oils, observed on Gulf Coast base oil marketer.

Sunoco said the refinery sale effectively completes its divestiture of a large portion of its lubricants business. Earlier this year, the Philadelphia-based company sold its Kendall brand name and motor oil business, along with its Sunoco finished lubricants business.

It has been trying to sell the Yabucoa refinery since before closing the facility in early July. Neither Sunoco nor Shell Chemical disclosed the price of the sale. The deal is subject to due diligence reviews and other terms. Before final closing, scheduled for Jan. 1, the companies will agree to a toll processing agreement under which the plant will be restarted.

A Shell Chemical spokesman said the reconfigured plant will have capacity to produce 52,000 barrels per day of fuel products — mainly for Puerto Rico — and 25,000 bpd of feedstock for Shell olefins plants in Deer Park, Texas, and Norco, La.

Opened in 1971, Yabucoa originally refined crude oil into fuels and feedstock for its own base oil refinery. Sunoco eventually closed the crude units and fuels refinery and began to use distillate feedstock to make only base oil. The refinery is located on 197 acres and employs more than 150 people

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