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Shell has confirmed that its UK sale agreement with Essar Energy includes the oil major's marine fuels businesses associated with its Stanlow refinery.

Shell received an offer from Essar Energy to buy its 272,000 barrel-per-day Stanlow refinery and associated local marketing businesses in the UK for a total expected consideration of some $1.3 billion.

The two companies signed an exclusivity agreement on Friday 18th February, until 1st April 2011, under which break fees would be payable if either company fails to sign an asset sales agreement.

The offer from Essar covers oil products and chemicals manufacturing and distribution terminal assets, plus the commercial fuels, bulk fuels and local marine fuels businesses associated with the Stanlow refinery, but does not include any of Shell’s UK Retail sites, the Shell higher olefins plant and alcohols units, the lubricant oils blending plant, lubricants marketing business, Shell aviation operations at airports, non-local marine business, marine lubricants, commercial road transport marketing businesses, bitumen marketing business or Shell technology centre Thornton.

In the UK, Shell supplies and distributes oil products to a range of marine, lubricants, airport and bitumen customers and has a network of more than 900 branded retail sites. The company also has upstream operations in the UK sector of the North Sea and 3 onshore gas plants.

Shell said the deal is aligned with its strategy to concentrate its global manufacturing portfolio on larger and more sophisticated assets.

In addition to the proposed sale of the assets, which would be expected to close by mid 2011, the two companies would enter into an exclusive five year crude supply contract by Shell to Essar and into long-term agreements for the supply of products in the UK by Essar to Shell.