Motiva to sell US rack terminal business

Market: Oil products
21/04/23

US refiner Motiva Enterprises is planning to sell its wholesale fuel terminals in a bid to focus on the more profitable areas of refining crude and petrochemical products.

Motiva told employees in a meeting last week that its 25 US rack terminals — used to load gasoline, diesel and other refined products onto tanker trucks for distribution — are for sale and employees can expect further news in one to two months on the potential transaction, according to company employees familiar with operations.

Potential buyers were not discussed during the meeting, but workers were told that severance packages would be in place depending on the terms of the sale, according to Motiva employees with direct knowledge of the meeting.

Motiva did not respond to multiple requests for comment.

The Houston-based company, which is wholly owned by Saudi Arabia's state-controlled Aramco, operates the 626,000 b/d Port Arthur, Texas, refinery, which is one of the largest refineries in the US.

The company's Port Arthur complex, its Port Neches terminal and marine terminals are not included in the sale, employees and union representatives told Argus.

The motive for the potential sale of the terminals business is to focus on the more profitable refining and petrochemicals businesses, Motiva indicated during last week's meeting.

Of the 24 Motiva terminals listed with the US Internal Revenue Service (IRS) as active fuel terminals as of 18 March, seven are in Texas, five are in North Carolina and the remainder in Florida, Georgia, South Carolina, Virginia and Maryland. It is unclear why the IRS numbers differ from Motiva's internal communications. The company's website said it operates 26 terminals and more than 100 other supply locations with over 10mn bl of storage capacity.

Aramco said in January that its Houston-based subsidiary Motiva Trading had been acquired by its international energy trading unit Aramco Trading (ATC), leading to the launch of a new entity, Aramco Trading Americas (ATA). ATA will act as ATC's regional office as it looks to expand its trading business in North and South America. ATA will also become the sole supplier and buyer of crude and refined products for Motiva Enterprises.

Merging the two trading subsidiaries may be a needed precursor for a potential partial initial public stock offering (IPO) of ATC. Aramco has yet to make any public statements with respect to the potential IPO of its trading arm, but chief executive Amin Nasser last year said the firm is "always looking" at its portfolio.

By Nathan Risser

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