Valero sells Delaware refinery, pipeline assets for $220MM

Source: Valero

Valero Energy Corporation (VLO) reached an agreement to sell the assets of its terminal operation and discontinued operations in Delaware City to the Delaware City Refining Company LLC and Delaware Pipeline Company LLC, wholly owned subsidiaries of PBF Energy Partners LP. The sale price is $220 million for the assets, and Valero will retain the de minimis levels of remaining crude oil and refined products inventories that have not yet been liquidated. The transaction is expected to close during the second quarter contingent upon regulatory approvals, as well as the parties’ completion of certain agreements with the state of Delaware.

After the transaction closes, Valero will continue to supply its area customers via a terminaling agreement with the site’s new owners.

Valero made the decision to permanently close and discontinue operations at the refinery in November 2009 after unsuccessfully seeking a buyer. Earlier this year, Valero and PBF entered discussions with the support of Gov. Jack Markell regarding a possible purchase of the site’s assets.

“We are pleased that we have reached this agreement with PBF,” said Valero Chairman and CEO Bill Klesse. “The transaction reflects incremental cash flow and a good value for the terminal and shut-down refinery units. For the state of Delaware, this provides the potential to regain manufacturing jobs in the future. We thank Gov. Markell for his active participation in facilitating our agreement.”

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