A subsidiary of Valero Energy Corporation (NYSE: VLO) has signed an agreement to sell the ownership of its 185,000 bpd Paulsboro refinery to PBF Holding Company LLC, a wholly owned subsidiary of PBF Energy Company LLC.
The net sale price is approximately $360 million plus the value of net working capital and inventories, currently estimated to be $275 million. Consideration for the $360 million sale price consists of $180 million in cash at closing and a note in the amount $180 million with a term not to exceed 18 months. The transaction is expected to close in the fourth quarter and is contingent upon regulatory and other customary approvals.
Valero decided to explore its strategic options for the Paulsboro refinery in the third quarter of 2009 as part of its ongoing evaluation of its portfolio of assets. Earlier this year, a PBF subsidiary purchased the terminaling operations and idle refining assets at Valero's shutdown Delaware City refinery.
"The sale brings Valero a fair value for the operation and will allow us to achieve our stated strategic goal to exit refining in the U.S. East Coast and focus on other opportunities," said Valero Chairman and CEO Bill Klesse.
Located in Paulsboro, New Jersey, the refinery produces a wide range of petroleum products including lube oil base stocks, liquefied petroleum gases (LPGs), gasolines, mid-distillate products, asphalt, petroleum coke and molten sulfur. The refinery receives a variety of feedstocks from its deepwater access on the Delaware River, including sour crudes. The Paulsboro Refinery employs about 510 people and has a total throughput capacity of about 185,000 barrels per day.