Valero to acquire Chevron’s UK Pembroke refinery for $730m

11 March 2011 13:56  [Source: ICIS news]

TORONTO (ICIS)--Valero has agreed to acquire Chevron’s 220,000 bbl/day UK Pembroke refinery and related assets in a $730m (€533m) cash deal, the US-based oil companies said on Friday.

On completion of the deal, expected in the third quarter, Valero will also acquire working capital and inventories valued at about $1bn, the said.

The Pembroke facility in Wales is a large complex refinery witch catalytic cracking capacity. In addition to 220,000 bbl/day of crude oil processing capacity it can also process 50,000 bbl/day of other feedstocks, Valero said.

About 5% of the refinery's products are chemicals and liquefied petroleum gas (LPG), it added.

Valero’s purchase price includes ownership interests in four major product pipelines and 11 fuel terminals, a 14,000 bbl/day aviation fuels business, and a network of more than 1,000 Texaco-branded wholesale sites, it said.

"This acquisition of quality assets enhances our portfolio and gives us opportunities for profitable growth,” Valero CEO Bill Klesse said.

“After exiting refining in the US East Coast last year, this acquisition provides an opportunity for our company to supply that market more competitively, when it's economic to do so,” he added.

Chevron said the sale is in line with its strategy to focus its downstream business primarily in North America and the Asia-Pacific region.

However, Chevron would retain its upstream, lubricants and Oronite additives businesses in Europe, as well as its aviation business in Sweden, Greece and the Benelux, it said.

Chevron added that it is soliciting bids for “certain operations” in the Caribbean and some Central American markets. But it would continue its downstream operations in Colombia, El Salvador, Guatemala, Honduras, Panama, Mexico and Brazil, it said.

Last month, India’s Essar Energy last month signed an exclusivity agreement to buy Shell’s 296,000 bbl/day Stanlow refinery in the UK.

($1 = €0.72)

By: Stefan Baumgarten
+1 713 525 2653

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