Environmental Challenge
After decades of Canadian oil refining, Shell Global found themselves holding 135 environmentally distressed properties throughout Canada. These environmental liabilities consisted of former distribution centers for bulk petroleum products, oil transfer and refining facilities, and other sites impacted by years of petroleum-related business activities. Operations on these sites had ceased, leaving behind a large portfolio of shuttered sites impacted by petro-hydrocarbons.
Shell determined that managing contaminated real estate was outside their core business and decided to seek alternative options.
Environmental Risk Assumption & Real Estate Purchase
Shell began searching for a way to divest these contaminated sites and transfer their environmental liabilities, while receiving fair compensation for the real estate. At the same time, due to their role in the contamination, Shell wanted to guarantee complete and final restoration, and eliminate any environmental impacts that may have been caused as a byproduct of their operations. Shell approached Environmental Liability Transfer, Inc. (ELT) for a liability transfer solution – ELT was able to completely indemnify Shell of the contaminated properties.
By transferring environmental liabilities and remedial obligations to ELT, Shell was able to receive corporate indemnification, guarantee that these distressed sites were restored, and reallocate capital and manpower to core operations.
The transaction enabled Shell the ability to divest non-core, contaminated real estate, transfer the environmental liabilities to a third party, and guarantee clean-up of the environmental conditions.
Environmental Remediaion
ELT then tasked their affiliate company, EnviroAnalytics Group, LLC (EAG), with the responsibility of cleaning these properties and bringing them into full compliance with Canada’s Ministries of the Environment. EAG entered into a remediation services agreement with Shell Global to address the contamination in accordance with Shell’s and the Canadian Ministry of the Environment’s requirements, which will allow for full remediation and reintegration of these sites back into productive use.
Sustainable Redevelopment
Remedial work has been prioritized to facilitate the reuse/resale of this portfolio. Commercial Development Company, Inc. (CDC) is currently performing land studies and market assessments to determine the highest and best use for these sites going forward, which could include a variety of vertical development purposes including light-industrial, commercial, and mixed-use.
Results
By transferring environmental liabilities and remedial obligations to ELT, Shell was able to receive corporate indemnification, guarantee that these distressed sites were restored, and reallocate capital and manpower to core operations.
