June 26 (Bloomberg) -- Royal Dutch Shell Plc, Royal Vopak NV and Greenergy International Ltd. agreed to buy the U.K.’s Coryton oil refinery and convert it into an import terminal.
Vopak will operate the facility once work has been completed, the companies said today in a joint statement, without disclosing financial terms. The Coryton plant, which stopped operating earlier this month, is the second refinery in the U.K. to close since 2009.
“This investment will create the U.K.’s first deep water fuel import terminal, making it possible to bring in diesel economically from the most modern refineries anywhere in the world,” Greenergy’s Chief Executive Officer Andrew Owens said in the statement.
The Coryton plant near London was previously part of Petroplus Holdings AG, which was Europe’s largest independent refiner when it filed for insolvency in January. The plant supplied about 20 percent of fuel in the U.K.’s southeast.
The initial storage capacity at the site will be about 500,000 cubic meters, with potential to double that at a later stage, the statement said. The facility is on the Thames River.
The sale of the assets will be completed once the refinery closure process ends, PricewaterhouseCoopers LLP, Petroplus’s U.K. administrator, said in a statement. About 180 of the 500 workers at the site will be given notice tomorrow, PwC said.
“This is devastating news,” Russ Ball, an official at Unite, the U.K.’s largest labor union, whose members include the workers at the Coryton site, said by phone from Brighton, England. “Coryton, both the refinery and the community, have been badly let down by the government.”
Of Petroplus’s five refineries in Europe, three have been sold to trading companies that are running the plants while one is operating under a temporary supply agreement.
“With diesel sales continuing to grow ahead of petrol sales in the U.K., this is a vital development to ensure a low cost and reliable fuel supply for the British motorist in the years ahead,” Owens said.
Petroplus’s Teesside plant was also converted to storage in 2009. Petroplus bought the 175,000 barrel-a-day Coryton plant from BP Plc for $1.4 billion in 2007.
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