Windsor

Shell looks to sell its Sarnia operations

Oil giant Shell is putting its Sarnia Manufacturing Centre on the market, saying it is "no longer a natural fit" with the company's "evolving portfolio."

Oil giant says it will continue to run the facility if no buyer is found

The facility employs approximately 350 workers and produces a variety of products, including gasoline and solvents. (Rex Larsen/Shell)

Shell is placing its Sarnia Manufacturing Centre on the market, saying it's "no longer a natural fit" with the company's "evolving portfolio."

In a statement received by CBC News, the company said the process is "expected to take several months as potential buyers indicate their interest and Shell reviews proposals."

The company hopes to sell both the Sarnia Manufacturing Centre and its distribution terminals in Sarnia and Hamilton.

Shell also stated that if no suitable buyers are found, it will continue to operate the facility, which is located south of Sarnia in Corunna and employs approximately 350 workers, producing products such as gasoline and solvents.

Shell's Sarnia Manufacturing Centre was originally built in 1952 by Canadian Oil Companies Limited. (Rex Larsen/Shell)

Dan McTeague, a senior petroleum analyst with GasBuddy, told Afternoon Drive host Chris dela Torre that he wasn't surprised by the announcement.

"Perhaps its playing a little bit of catch-up with companies south of the border like Chevron, like ExxonMobil, BP who've all been investing more so in shale oil — and to a lesser extent in natural gas," he said.

"I think that's what Shell is indicating ... that it's more interested in looking to those as more of the opportunities down the road."

However, McTeague calls the timing of the announcement "suspicious."

A big employer in Sarnia-Lambton is looking to sell their operation. Shell Canada has announced they're looking for a company to buy their Sarnia Manufacturing Centre. To understand what this means, we reached Dan McTeague, a senior peteroleum analyst with GasBuddy. 5:17

He said Husky oil made a similar announcement the night before, with a small refinery in Prince George, B.C.

"You don't normally see two out of 13 refineries ... in Canada suddenly make a decision within 24 hours of each other," said McTeague.

He pointed to the federal government's announcement of clean fuel standards and said refineries in other countries will not have to deal with standards as strict as Canada.

The facility can process up to 75,000 barrels of crude oil per day. (Rex Larsen/Shell)

McTeague said Sarnia-Lambton should consider the announcement a "cautionary note," explaining that back in the mid-2000s, Shell was actually looking to expand the facility.

While he doesn't think the refinery will shut down, McTeague suggested that it could happen in the future — and would result in making gasoline more expensive for drivers in Ontario.

"There are alternatives down the road for companies to either terminal or bring in product from the United States," he said.

The facility is located on St. Clair Parkway, about 10 kilometres south of Sarnia in Corunna. (Rex Larsen/Shell)

With files from Radio-Canada's Floriane Bonneville

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