PBF Energy Inc.’s (NYSE: PBF) subsidiary has signed a definitive agreement to purchase the 155,000 barrel-per-day Torrance, California, refinery, and related logistics assets, from ExxonMobil. With the acquisition, PBF will increase its total throughput capacity to approximately 900,000 barrels per day. The purchase price for the assets is $537.5 million, plus working capital to be valued at closing.
PBF expects to finance the transaction with a combination of cash, debt and equity. The transaction is expected to be immediately accretive to earnings. The Torrance transaction is expected to close in the second quarter of 2016, subject to customary closing conditions and regulatory approvals. The refinery will be restored to full working order prior to close.
“Southern California is a very attractive market and we are excited to become a supplier in the region. PBF’s management team has extensive experience operating in California and we are entering at a very attractive purchase price for the Torrance refinery.”
In addition to refining assets, the transaction includes a number of high-quality logistics assets including a network of crude and products pipelines, product distribution terminals, and refinery crude and product storage facilities. The most significant of the logistics assets is a 171-mile crude gathering and transportation system that delivers San Joaquin Valley crude oil directly from the field to the refinery. Additionally, included in the transaction are several pipelines which provide access to sources of crude oil including the Ports of Long Beach and Los Angeles, as well as clean product outlets with a direct pipeline supplying jet fuel to the Los Angeles airport. The refinery also has crude and product storage facilities with approximately 8.6 million barrels of shell capacity.
In light of PBF’s expanding geographic footprint and organizational needs, the company has decided to make certain management changes. The company will set up a wholly owned subsidiary, PBF Energy Western Region LLC, to hold all of the Torrance related assets. Jeffrey Dill will transition to the role of president, PBF Energy Western Region LLC. Dill has been general counsel of PBF since its inception in 2008 and his prior experience includes almost 10 years working in the refining and logistics industry in Southern California. In his new role, Dill will be responsible for managing PBF’s relationships with elected officials, community leaders and regulatory agencies in California.
Paul Davis and Tom O’Connor, formerly co-heads of Commercial, will now be responsible for the company’s commercial operations on a regional basis. Davis will be relocating to Southern California, and will head up a West Coast-based commercial team that will be responsible for commercial activities in the region. O’Connor will oversee all other commercial operations, including those for the Chalmette Refinery, along with commercial risk activities.
Trecia Canty, previously vice president, senior deputy general counsel, has been promoted to senior vice president, general counsel, and secretary. Canty joined PBF in 2012 from Southwestern Energy and has supported a range of activities including transactions across the finance, commercial, and refining functions at PBF.