Shell Canada Products (NYSE:RDS-A, NYSE:RDS-B) and Delek US Holdings, Inc. (NYSE: DK) have agreed to end negotiations regarding a potential sale of the Shell Montreal East Refinery.
Shell and Delek US met last week in an effort to address outstanding issues that both parties had been unable to resolve in negotiations held earlier this year. Negotiations once again reached an impasse, leading both parties to terminate discussions.
“Unfortunately, after considerable efforts to find common ground on a number of complex issues, both sides have determined not to pursue further negotiations with regard to the Montreal East Refinery,” said Uzi Yemin, President and Chief Executive Officer of Delek US Holdings.
“We thank Delek US for their interest in the Montreal East Refinery,” said Richard Oblath, Vice President, Downstream Portfolio for Shell. “This concludes a more than one-year process conducted by us to find a buyer for the Montreal East refinery. During this time, more than 100 companies were contacted regarding the asset, none of whom saw an acceptable future for the site as a refinery.”
“Because no buyer for the refinery had been identified by the end of last year, we announced on January 7, 2010 that we intended to convert the refinery to a terminal and so started detailed planning for the conversion,” said Oblath. “Although we retained hope that a buyer could be found, the conversion was planned in parallel to the sale process, since there was no guarantee a sale would occur.”
“We must now direct our attention toward converting the refinery into a terminal in a way that is safe and ensures that there is an adequate supply of fuel for our customers in Quebec, Atlantic Canada, and Eastern Ontario. In this light we look forward to the completion of the regulatory review so we can complete this activity as soon as possible,” concluded Oblath.
Both Shell and Delek US would like to thank the Special Committee, Government members, union representatives, customers, and employees and their families for their patience and understanding during this process.
Shell has been operating in Canada since 1911 and employs approximately 8,000 people across the country. A leading manufacturer, distributor and marketer of refined petroleum products, Shell produces natural gas, natural gas liquids and bitumen, and is Canada’s largest producer of sulphur. Shell is one of Canada’s oil sands developers and operates the Athabasca Oil Sands Projects on behalf of the joint venture partners.