SINGAPORE, Feb 1 (Reuters) - Royal Dutch Shell saidon Monday it had agreed to sell its shares in Shell RefiningCompany in Malaysia to a unit of a private Chinese refiner for$66.3 million.
It marks the first overseas refinery acquisition by aprivate Chinese refiner, shortly after Beijing allowed dozens ofthe country's independent, small oil plants to import crude forthe first time.
Shell will sell the 51 percent stake to Malaysia HengyuanInternational Ltd, while the remaining shares are held byinstitutional and public shareholders, a Shell spokeswoman said.
Malaysia Hengyuan International Ltd is a unit of China'sShandong Hengyuan Petrochemical Company.
The transaction is expected to be completed in 2016, subjectto regulatory approval, Shell said.
"It is (Malaysia Hengyuan's) intention for Shell RefiningCompany to invest in the upgrades needed to meet the Euro 4M andEuro 5 requirements," the company added, referring to cleanerfuel specifications.
Shell Malaysia Trading will continue to supply its retailand commercial customers in Malaysia and honour its existingcommitments which include a long-term offtake deal from ShellRefining Company, it said.
Shell Refining Company is a key petroleum products supplierto Shell's downstream businesses in Malaysia, its website says.
The oil refinery at Port Dickson has a capacity of 156,000barrels-per-day (bpd) with 90 percent of its oil productsconsumed within Malaysia.
Shell has been exploring options for the company includingthe sale of the Port Dickson refinery or converting it to astorage terminal since at least January, 2015.
"The sale is consistent with Shell's strategy to concentrateits global downstream footprint and businesses where it can bemost competitive," the company said in a statement.
Shell said earlier this month that it could further cutcombined capital investments below the $33 billion targeted for2016.
Its asset sales in the past two years have amounted to morethan $20 billion, far outstripping its original plan to make $15billion worth of divestments. (Reporting by Jessica Jaganathan; additional reporting by ChenAizhu in Beijing, editing by David Evans)
