By Robb M. Stewart

MELBOURNE, Australia--Royal Dutch Shell PLC (RDSB) has agreed to a deal to sell its Australian aviation fuels business in Australia to Viva Energy Australia Pty. Ltd. for about US$250 million.

Viva Energy already sells Shell-branded fuels and lubricants in the country under a licensing arrangement and will continue to sell Shell-branded aviation fuels following the sale.

In a statement Monday, Shell said the deal is expected to be completed by mid-2017, subject to regulatory approval. Employees of Shell Aviation Australia will remain employed by the company as it transfers to its new owner, it said.

Viva Energy, controlled by European energy trader Vitol Holdings B.V., was formed in 2014 with the acquisition of Shell's Geelong refinery in southern Australia and its 870-site retail business, along with its bulk-fuels and chemicals businesses in Australia, in a deal that was worth about US$2.6 billion. That sale didn't cover the aviation business and some of Shell's lubricants businesses.

Viva Energy Chief Executive Scott Wyatt said the company has been the exclusive supplier Shell's jet fuel in Australia over the past two years, and the acquisition of the business would allow the company to expand into airports and provide direct supplies to customers. He said there were opportunities to expand the capacity of the supply chain and to increase sales in smaller airfields throughout the country.

Write to Robb M. Stewart at robb.stewart@wsj.com

(END) Dow Jones Newswires

December 18, 2016 22:54 ET (03:54 GMT)

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