Esso Italiana Srl announced the sale of its Augusta refinery in Sicily, three fuel terminals in Augusta, Palermo and Naples, as well as related pipelines to the Algerian state oil company SONATRACH.
“The decision is the result of a thorough and careful evaluation,” said Gianni Murano, president and CEO of Esso Italiana.
Esso Italiana and ExxonMobil will enter into multi-year commercial and technology agreements with SONATRACH for refinery products, operation, improvement, and the use of the Augusta, Palermo and Naples terminals. The transaction does not affect its branded retail stations, fuels and lubricants customers or distributors, or ExxonMobil’s other operations in Italy.
“SONATRACH is extremely proud to have its first international investment in refining in Italy, and in particular in Augusta, ” said Abdelmoumen Ould Kaddour, SONATRACH chairman and CEO. ” We are committed to maintaining the employment, continuity of management, operational excellence and high standards to health, safety and the environment. We look forward to a lasting and safe presence, and are keen to engage with the workforce, authorities and communities.”
The 68-year old refinery, which has an annual refining capacity of 9.5 million tonnes per year, also produces 500,000 tonnes per year of Group I base oils. In 1998, the Augusta refinery completed an expansion program for its catalytic desulphurisation plant (hydrofiner). In 2004, both the Augusta and Trecate refineries completed massive investments to be able to produce very low sulfur fuels, in line with the specifications set by European legislation effective in 2005.
“ExxonMobil is committed to meeting its customer’s evolving needs. We will continue to provide a reliable supply of Group I base stocks, globally and in EAME including the ExxonMobil AP/E CORE™ slate manufactured in Augusta,” said Julia Reussmann, sales manager, EAME Basestocks and Specialties. “With this agreement and a robust manufacturing network around the world producing Group I CORE, we will remain the largest global marketer of high-quality Group I base stocks.”
Esso Italiana said it will work with SONATRACH to carefully manage the transition, with continued focus on personnel issues, safety, community relations and environmental protection.
The sale, which has been approved by shareholders, is expected to close by the end of 2018 and is subject to regulatory approval.