Neste Oil to sell its holding in an iso-octane plant in Canada

abarrelfullabarrelfull wrote on 09 Dec 2011 08:43
Tags: canada deals neste refinery

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Neste Oil is to sell its 50% holding in an iso-octane plant in Edmonton, Canada to Canada's Keyera Corp. The plant has an annual nameplate capacity of 520,000 tons and employs 100 people. Neste Oil will sell its whole asset, which is valued at USD 99 million or over euro 70 million. Furthermore Neste Oil shall sell the associated product and feedstock inventories at closing to the buyer.

The divestment will require the approval of the US and Canadian competition authorities. The transaction is expected to be closed within a couple of months. The divestment will have a nearly euro 90 million positive impact on Neste Oil's cash flow and over euro 20 million positive impact on IFRS result.

Iso-octane is a gasoline component produced at Edmonton plant from butane using Neste Oil's NExOCTANE technology. It is used in the production of low-emission, high-octane gasoline.

"The sale of the holding concludes Neste Oil's planned divestment program for the Oil Products & Renewables business area designed to enable us to concentrate on our core businesses," says Matti Lehmus, Neste Oil's Executive Vice President, Oil Products & Renewables. "Over the last 1.5 years, we have already divested our ETBE plant in Portugal and our PAO plant in Belgium. In line with our strategy, we are focusing on growth in renewable fuels and premium-quality VHVI base oil and in developing our refining operations.

"Keyera is a natural choice to take over our holding in the Edmonton plant, as it has supplied feedstock to the facility and provided storage services for several years. We believe that they will be well placed to develop the business in the future."

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