Essar to buy Shell's Stanlow refinery for $350 million and inventory cost

Essar Energy plc, the London-listed integrated energy company of the Essar Group, has agreed to acquire the oil refinery and other associated assets of Royal Dutch Shell's refinery at Stanlow, near Ellesmere Port, Cheshire in the UK, for $350 million (£219 million) in cash.

The two have entered into an asset purchase agreement under which Essar will acquire the Stanlow Refinery, which is the second largest refinery in the UK, gaining direct access to the UK market.

The acquisition will also give Essar Energy an option to export products from its high value refinery at Vadinar, in Gujarat.

Essar Energy said the acquisition of the Stanlow Refinery is at a competitive price when compared with other recent refinery transactions.

Essar Energy had, on 18 February 2011, announced the terms agreed with Shell for the acquisition of the Stanlow Refinery.

"We are very pleased to have agreed this transaction with Shell. Stanlow is a high quality refinery and is an excellent fit with our strategy. We look forward to taking ownership of Stanlow in due course and making operational improvements, which will enhance production and better optimise the facility," Naresh Nayyar, Essar Energy's chief executive, said.