(Reuters) – Chevron is likely to close a deal for the sale of its 50% stake in Singapore Refining and other regional assets to Japan’s top refiner Eneos in May, two sources familiar with the matter said.
The U.S. major had been expected to complete the deal, valued at $1 billion or more, in the first quarter, Reuters reported earlier, but the timeline has since been pushed back slightly following a major energy supply disruption caused by the U.S.-Iran war.
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Chevron and Eneos declined to comment. Morgan Stanley, which has been appointed by Chevron to handle the sale also declined to comment.
Both parties are reassessing some terms in the deal, including crude procurement for the refinery and offtake agreements for refined products, two other sources said.
Currently, PetroChina and Chevron are taking turns to supply crude to the 290,000-barrel-per-day refinery on Jurong Island every quarter. The Chinese major shipped crude from northeast China’s Dalian to Singapore last month, in an unusual move to fill the shortfall at SRC, Reuters reported.
PetroChina did not respond to a request for comment. Reuters reported earlier that the Chinese state major has a first right of refusal to purchase Chevron’s share and a last look at the final sale decision.
The refinery joint venture, which relies on the Middle East for the bulk of its crude imports, is operating at a lower rate of 60% after the war drastically reduced supply to the plant.
SRC imported around 71 million barrels of crude via the Strait of Hormuz last year, equivalent to about 78% of its total imports, shiptracking data on Kpler showed.
Reporting by Trixie Yap and Yantoultra Ngui, additional reporting by Chen Aizhu, Yuka Obayashi, Kane Wu and Shariq Khan; Editing by Florence Tan and Louise Heavens
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