Shell has reached a conditional agreement with Malaysia Hengyuan International Limited (MHIL) for the sale of its 51% shareholding in the Shell Refining Company (SRC) in Malaysia for USD 66.3 million. The transaction is expected to complete in 2016, subject to obtaining regulatory approval.

Malaysia Hengyuan International Limited is a wholly-owned subsidiary of Heng Yuan Holdings Limited. Heng Yuan Holdings is a wholly-owned subsidiary of Shandong Hengyuan Petrochemical Company Limited (“SHP”), which is involved in the manufacture of petrochemicals.

The sale is consistent with Shell’s strategy to concentrate its global downstream footprint and businesses where it can be most competitive.

Shell, which is a leading retail fuels and lubricants provider in Malaysia, says it considers Malaysia to be an important country for Shell and that it will continue to invest in growing these businesses in the country. Shell added that MHIL intends to invest in upgrading Shell Refining Company’s capability to produce fuels that meet Malaysia’s Euro 4M and Euro 5 specifications.

“Shell Malaysia Trading will ensure security of supply to its retail and commercial customers in Malaysia and honour other existing commitments through an existing comprehensive supply strategy that includes a long-term offtake from Shell Refining Company,” Shell said in a statement.

Other recent downstream divestments include the sale of downstream businesses in Australia and Italy; a number of retail sites in the UK; and the initial public offering of, and further drop downs to, Shell Midstream Partners L.P. Shell has also agreed to sell its marketing business in Denmark and Norway, its LPG businesses in France and a 33.24% shareholding in Showa Shell Sekiyu KK.