PBF Energy inks deal for California refinery, logistics assets

PBF Holding Co. LLC, a subsidiary of PBF Energy Inc., Parsippany, NJ, has entered an agreement to buy ExxonMobil Corp.’s 155,000-b/d refinery in Torrance, Calif., which has been shuttered since early this year following an explosion and ensuing fire that struck the plant in February (OGJ Online, Feb. 19, 2015).

The deal—which includes the refinery as well as ExxonMobil’s related California product terminals, crude and product pipelines, and other logistics assets—amounts to $537.5 million, plus working capital that will be valued at closing, PBF Energy said.

To be financed with a combination of cash, debt, and equity, PBF Energy’s purchase of the California operations comes as part of the company’s continued growth strategy to expand both its refining and logistics holdings across the US, said PBF Chief Executive Officer Tom Nimbley.

The company, which currently operates a 190,000-b/d refinery in Delaware City, Del.; a 180,000-b/d refinery in Paulsboro, NJ; and a 170,000-b/d refinery in Toledo, Ohio, also recently announced its entry into a $322-million deal with ExxonMobil and Petroleos de Venezuela SA (PDVSA) for the purchase of Chalmette Refining LLC, an ExxonMobil-PDVSA joint venture that operates a 189,000-b/d refinery in Louisiana, as well as related logistic assets along the US Gulf Coast (OGJ Online, June 18, 2015).

The related Torrance assets will be held by PBF Energy Western Region LLC, a newly created and wholly owned subsidiary established to support the company’s expansion into the US West Coast, PBF Energy said.

Pending regulatory approvals and restoration of the refinery to full-working order following damages from the February fire, the Torrance transaction is scheduled to close during second-quarter 2016, according to PBF.

ExxonMobil said it expects to hand over control of the refinery and related logistics assets to PBF Energy by mid-2016.

Once completed, the Torrance acquisition will boost PBF Energy’s total refining capacity by more than 60% to about 900,000 b/d.

Logistics assets

In addition to the high-conversion refinery, which can process heavy, high-TAN, and high-sulfur crudes, PBF Energy will acquire the following as part of the Torrance transaction.

Crude gathering, logistics:

• M-1, M-55, and M-70 pipelines. These pipelines provide the refinery direct connection to heavy San Joaquin Valley crude oil, the primary feedstock processed at Torrance. PBF’s acquisition of the lines includes six associated pump stations.

• M-131, M-134, M-137, and M-146 pipelines. These pipelines link the refinery to additional domestic sources of crude oils, including production from Aera Energy Inc.’s Ventura County, Calif., operations, as well as to imported waterborne varieties.

Bulk gasoline-lubricants storage, distribution:

• Refined product terminals in Vernon, Calif., and Atwood, Calif.

• Lubricants distribution center in Vernon.

Refined product logistics:

• M-141, M-145, M-3, L-42, M-119, and L-43 pipelines. These pipelines connect the refinery to production distribution outlets that include Long Beach Harbor, the Port of Los Angeles, and the Los Angeles international airport, as well as to terminals at Vernon, Atwood, and the Port of Los Angeles’ Southwest Terminal Area No. 1.

The transaction also includes shell capacity of 8.6 million bbl in on site crude, intermediate, and finished product storage at the refinery.

Contact Robert Brelsford at rbrelsford@ogjonline.com.

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