Environmental Liability Transfer | Shell Global Divests environmentally-hazardous oil refining portfolio in Canada.
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How ELT helped Shell Global divest – and cleanup – 135 environmentally-hazardous oil transfer and refining facilities throughout Canada

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.

 

This case study is part of an article (”An In-Depth Look Into the Role of Environmental Liability Transfers During Corporate Divestitures”) and was reproduced with permission from the Environmental Due Diligence Guide Report, Supp. 288, Pg. 231:2771 (February 18, 2016). Copyright 2016 The Bloomberg Bureau of National Affairs, Inc. (800-372-1033) www.bna.com.

Strengthen your balance sheet by shedding environmental liabilities and non-core assets.

 

Our clients have seen immediate and positive impacts from divesting environmental liabilities. For publicly-traded clients, the removal of environmental liabilities has resulted in improved investor sentiment and immediate elevations in stock price – up to 17%. While these results are not guaranteed, and vary based on size and scope of company, unlocked capital and upgraded balance sheets win the approval of all company stakeholders and can improve the overall valuation of your company.

 

ELT’s robust corporate indemnifications can assume all environmental obligations and guarantee site remediation to regulatory standards.

 

ELT is currently seeking to acquire environmental liabilities and non-core assets in the following sectors:

 

Seeking-to-Acquire

 

 

Contact ELT

If legacy environmental issues are impacting your operations, ELT can acquire the liability (with or without real estate) and provide robust indemnification from all environmental obligations – past, present, and future.

 

For a confidential discussion regarding your environmental liabilities, please contact us.