re: Baton Rouge-based firm bids $1.25 bln for Shell's idled Convent refinery

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Yeah that’s incorrect. It waa upgraded in the early 80’s and has been running sour crude ever since.

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Placid is privately owned.

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A group that says it was rebuffed in an effort to buy Royal Dutch Shell's Convent oil refinery for $1 billion says it is determined to buy and also build a new refinery to process lighter oil piped in from the Bakken shale play in the North Dakota area.

"We were trying to take advantage of existing infrastructure at the Convent refinery that was earlier indicated to be for sale," said Coleman Ferguson, who represents proposed buyer American Clean Energy Refining LLC and had worked at Texaco for more than three decades and is familiar with the Convent refinery. "If they (Shell) don't want to sell the refinery for some reason we're still interested in the docks, tanks and infrastructure. We are going to build a refinery we've just got to find a site," he said.

The startup company looks to build a second stand-alone refinery for $2 billion, which was planned to be on the Shell site, with capacity of 300,000 barrels of "frack oil" each day, he said.

Shell did not directly comment on the group's effort to buy the Convent refinery.

"Despite an extensive marketing process, a viable buyer was not identified," said Curtis Smith, spokesperson for Shell in an email.

"In the marketing process of the Convent Refinery and all other assets globally, we consider a wide range of qualifications and factors, including a prospective buyer’s ability and experience to safely operate a complex manufacturing site."

The company had begun marketing its refinery in July 2020, but moved into shutdown mode several months later, laying off hundreds of workers and hundreds more contractors. Shell said it has found positions within the company for about 60% of the Convent workers.

Now the refinery is in the "final steps of the preservation process and will soon be a fully idled and preserved asset," according to Shell. The company continues to "actively evaluate" its options, including "potential future marketing efforts."

Ferguson said he was familiar with the Convent refinery decades ago when it was controlled by Texaco, a company where he worked his way up to a vice president in the Beaumont, Texas, area. He also is familiar with the Port Arthur refinery, previously under the Texaco umbrella. American Clean Energy Refining LLC negotiated with Shell for more than a year and at one point bid on three of the oil giant's stand-alone refineries but none of those bids were successful, Ferguson said.

"Our strategy was to be an export refinery for frack oil," he said. "If you look at frack oil, … it's green and comes from a strata eons ago and had premium value in its day but has to be blended into (gasoline)."

The company estimates there is roughly 5 million barrels of the light frack oil available in the U.S., with customers interested in buying it but lacking refinery capacity.

"We tried to do serious negotiations with them," Ferguson said, "but they were taking every action to shut it down. It makes no normal economic sense but there's pressure on companies to reduce their carbon (footprint). It's a new angle and it's real," he said.

The group's refinery plans have been in the works for the past decade as the global refinery market has consolidated but demand for some fuels remained steady and in some cases increased.

The group says it has the backing of an undisclosed fund of private equity investors through a financial business that controls "trillions of dollars" and does business on a global scale already.

"We're willing to put our money where our mouth is," said Steve Erdahl, co-founder of the business. "We're not looking for any tax cuts."

The group has met with St. James Parish officials, which the local government did confirm.

"Everybody knows somebody who works here," said Pete Dufresne, parish president of St. James. "We would love to see the plant back in operation."

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The refineries they want are the fully integrated refinery/chemical plants like Norco and Deer Park.


Man, this statement didn't age well.

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Shell doesn't believe they have the money to buy it and they aren't going to sell it to a company they don't think can safely run it.

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