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Shell, Phillips 66 buy 6.4 mln bbls of oil from U.S. emergency reserve

Oil companies Shell and Phillips 66 together bought 6.4 million barrels of oil last week from the Strategic Petroleum Reserve (SPR), according to a Department of Energy document released on Tuesday.

Shell bought 6.2 million barrels of oil and Phillips 66 bought 200,000 barrels on Jan. 18, said the department document, seen by Reuters.

The federal government held the sale to fund a revamp of the emergency oil stash, which is stored in salt caverns in Louisiana and Texas along the Gulf Coast. The Department of Energy had said it would sell up to 8 million barrels as part of its modernization program.

Shell will take delivery of 1.7 million barrels of oil by vessel, the documents said, while the rest of the barrels will move to buyers on pipelines.

The U.S. lifted its decades-long ban on exporting U.S. crude in December 2015, giving buyers of the oil the opportunity to export oil purchased from the reserves.

Phillips offered a price of $53.8985 a barrel for the oil, and Shell offered between $53.668 and $54.338 a barrel, the documents said.

On Jan. 18, benchmark West Texas Intermediate crude futures settled at $51.08 a barrel.

Shell and Phillips 66 both operate oil refineries along the U.S. Gulf Coast near sites of the strategic reserves.

(Reporting by Timothy Gardner and Liz Hampton in Houston; Editing by Chris Reese and Alan Crosby)

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