Royal Dutch Shell has asked Saudi Aramco for up to $2b as part of the breakup of their giant Motiva Enterprises refining joint venture (JV) in the US, The National informed. The payment would be a compensation for the Saudi company that will retain a larger share of the nearly two decade-old JV. The split of the JV is expected to be completed in October, however, the disagreements over the payment could postpone the final date, Reuters wrote.
Under the agreement announced in March, Aramco will take control of Motiva’s largest US refinery in Port Arthur, Texas, and retain 26 distribution terminals. The Port Arthur plant can process 603,000 b/d, while the two Louisiana plants, owned by Shell, jointly have a combined 473,000 b/d capacity. As a result, the large payment is due to Aramco retaining a larger refining capacity than Shell.
Aramco’s decision reflects the company’s strategy to expand its global refining footprint in order to secure markets for its crude oil and could also be part of its ambitious public offering plan.