Essar Oil UK secures $850 million to finance Stanlow refinery
London (Quantum Commodity Intelligence) - Essar Oil UK will pay off the UK government and start to transform the 201,000 b/d Stanlow oil refinery into a low carbon energy plant, after securing an $850 million financial package, partly by agreeing to long term crude supply deals.
In April, the troubled oil company was thrown a lifeline by the UK’s HM Revenue and Customs with a ‘time to pay’ deal that would last for at least six months.
After running into difficulties amid the slump in oil demand, Essar Oil UK was in talks with several parties, including Apollo Global Management, to provide about £400 million.
Part of any new funds secured by Stanlow’s parent company would be earmarked to repay at least part of a large outstanding bill owned to the UK government.
Essar Oil UK would not divulge details of the new backers, but said it came from a diversified range of sources, including bilateral arrangement with many of its key customers on enhanced payments terms and other long-term financings, linked primarily to crude supply.
The company added the cash will allow it to focus on its transition strategy, and it was already working on developing two blue hydrogen plants at Stanlow, which will attract $750 million in investment.