Neste Oil to sell PAO plant in Belgium

Neste Oil NV, a wholly owned subsidiary of Neste Oil Corp., and U.S.-based Chevron Phillips Chemical International NV, a wholly owned subsidiary of Chevron Phillips Chemical Company LLC, have signed an asset purchase agreement. Based on the agreement, Chevron Phillips Chemical would acquire Neste Oil’s polyalphaolefin (PAO) production facilities, quality control laboratory and related maintenance services in Beringen, Belgium. Chevron Phillips Chemical is also a producer of PAO. The transaction is expected to be closed within a few months and is subject to necessary closing conditions, such as competition authority approval. The transaction price was not disclosed. This divestment will have a minor positive impact on Neste Oil’s result. Following the closing, approximately 40 Neste Oil employees will transition to Chevron Phillips Chemical. The rest of the company’s employees in Belgium will remain employed by Neste Oil, which will continue its base oil customer service and supply chain management activities in Belgium. Until closing of the transaction, Neste Oil will continue full scope of its PAO plant-related business activities. The plant in Beringen produces PAO which is the main component used in high-performance synthetic lubricants and premium motor oils. Neste Oil started its base oil production in Beringen in 1991. The divestment will allow Neste Oil to focus on its high performance (very high viscosity index or VHVI) base oils business, where it has distinct competitive advantages. Neste Oil’s sales of VHVI base oils will exceed 1.3 million tons annually by 2014, following implementation of its projects in Bahrain and Abu Dhabi with its partners, says Matti Lehmus, executive vice president, oil products and renewables. (September 16, 2011)