By Tom Mcghie
Last updated at 10:15 PM on 19th March 2011
Attractive prospects: Stanlow oil refinery in Cheshire has huge storage depots
Shell is to sell its Stanlow oil refinery, the second-biggest in Britain, to fledgling Indian energy giant Essar Energy in a deal worth more than £700 million.
The refinery on the 1,900-acre site in Ellesmere Port, Cheshire, will be sold for £217 million while the oil and petrol in the refinery will be sold off separately for nearly £500 million.
When the deal is completed all 960 workers will be retained and, in an unusual concession by an employer, will be able to keep their generous and increasingly rare final salary pension scheme.
Essar, 25 per cent of which was floated on the London Stock Exchange for £1.8 billion last year, plans to invest hundreds of millions of pounds in the plant to allow it to make top-grade petrol from ‘heavy’ oil rather than the more expensive ‘sweet’ oil favoured in Britain.
This will let the refinery raise its productivity from about 220,000 barrels of oil a day to nearer 300,000 barrels.
A key element of the Essar plan is to use the massive storage depots next to the plant. These will hold petrol sent from its new refineries being built in India.
Essar ultimately wants to be a big player in the business of supplying petrol to Britain.
Essar is owned by the Ruia family, which is conservatively valued at more than £8 billion and owns businesses ranging from steel-making and retail outlets to Canadian newspapers.