By Erwin Seba

HOUSTON (Reuters) – Chevron Corp has emerged as a leading contender to buy a Royal Dutch Shell Plc refinery in the U.S. Pacific Northwest, three people familiar with the matter said on Friday.

Shell has been trying to sell its 145,000 barrel-per-day (bpd) Puget Sound refinery in Anacortes, Washington, for at least a year. Reuters reported in January 2020 that the refinery was for sale.

Spokespeople for Shell and Chevron declined immediate comment.

A deal is not guaranteed and analysts said competing refiners often look at other businesses to evaluate their own operations.

The Puget Sound plant supplies fuel markets in the northwest and competes with plants owned by BP, Marathon Petroleum and Phillips 66. Shell last month settled a seven-year-old dispute with the U.S. Environmental Protection Agency over past air pollution violations from the facility.

Chevron has been an active acquirer. It paid $4.1 billion for oil and gas producer Noble Energy last year and three years ago bought a 112,229-bpd Texas refinery for about $350 million.

Shell has been reducing its exposure to refining and last October said it would shrink its global refining portfolio to six sites from 14. The remaining plants will produce both fuels and high-value chemicals.

The Anglo-Dutch oil company permanently closed its 211,146-bpd refinery in Convent, Louisiana, in December as the COVID-19 pandemic crushed demand for gasoline. That plant remains for sale.

(Reporting by Erwin Seba; Editing by Daniel Wallis)