Spotlight on Refining: Shell, Tesoro and Irving Oil all in the News

Tesoro will purchase the Shell Wilmington, CA refinery and some associated assets, according to a January 29th press release issued by Shell. The deal, worth more than $1.5 billion, includes Southern California retail sites and Shell’s Wilmington products terminal. The deal still must clear regulatory hurdles.

Tesoro, who anticipates that that deal will be completed in the second quarter of 2007, also said that it would keep the retail sites under Shell's brand name. The refinery, first opened in 1923, has an approximate capacity of almost 100,000 barrels per day. Shell became the sole proprietor of the facility in 2002. Tesoro Corporation is headquartered in San Antonio, Texas, and is an independent refiner and marketer of petroleum products.

As one aging refinery in California changes hands, Irving Oil of Canada moved a step closer on January 25 to building the area’s first new refinery in more than two decades. No new refineries have been built in the United States since 1976, primarily because the regulatory hurdles associated with such a task have become so onerous. Canada last allowed the building of a new refinery in 1984.

With the beginning of the environmental permitting process, Irving Oil has taken their Saint John Refinery proposal to the next phase. Irving first announced that they would explore the possibility of building a second refinery in Saint John, NB last fall. The proposed new refinery would have a refining capacity of up to 300,000 barrels per day, and would be sited nearby the existing Irving Canaport deepwater crude receiving terminal. Together with the existing Saint John Refinery, the proposed, $7 billion refinery could create a combined total of up to 600,000 barrels per day of refining production capacity. The facility will, according to an Irving press release, create as many as 5,000 construction jobs and 1,000 permanent jobs.