(EnergyAsia, February 21 2014, Friday) — Shell said it has sold its Australian downstream business including the Geelong refinery in Victoria state and 870 retail service stations to European trader Vitol for a total of A$2.9 billion. (US$1=A$1.11).

The sale covers Shell’s bulk fuels, bitumen, chemicals and part of its lubricants businesses as well as a brand licence arrangement and an exclusive distributor arrangement in Australia for the major’s lubricants.

The Anglo-Dutch major said it will continue to hold onto its aviation business, and its lube oil blending and grease plants in Brisbane, which will be converted to bulk storage and distribution facilities.

Most of its downstream staff in Australia will continue to operate the business under the new owner.

The deal is subject to regulatory approvals and is expected to close in the coming months.

Shell, which converted its other Australian refinery in Clyde near Sydney in 2011, said last year it would convert Geelong into a fuel import terminal if it could not sell the refinery.

Shell said it will continue with its upstream businesses in Australia, in particular its liquefied natural gas portfolio.

“Australia remains important to Shell, but we are making tough portfolio choices to improve the company’s overall competitiveness,” said Ben van Beurden, Shell’s CEO.

Vitol President and CEO Ian Taylor said: “This is an exciting acquisition for us, a good company led by an experienced management team and underpinned by the value of the Shell brand.  Australia is a growing economy and we look forward to working with the management team to strengthen and grow the business.”

As part of its efforts to control cost, Shell has sold off refineries in the UK, Germany, France, Norway and the Czech Republic, and downstream businesses in Egypt, Spain, Greece, Finland and Sweden, with plans for further divestment in Italy and Norway.