08 October 2012 15:30 [Source: ICIS news]
(adds paragraph’s 10-12 with further detail on deal)
LONDON (ICIS)--BP has reached an agreement to sell its Texas City, Texas refinery and a portion of its retail and logistics network to US refiner Marathon Petroleum for $2.5bn (€1.9bn), the UK-based energy and chemicals firm said on Monday.
The total includes $600m of cash, an estimated value of $1.2bn for hydrocarbon inventories and a $700m six year earn-out arrangement based on future margins and refinery throughput, BP added.
BP expects the transaction will close by early 2013.
With this agreement, the total value of the divestments that BP has agreed since the beginning of 2010 is now more than $35bn. The company expects this to reach $38bn by the end of 2013.
The refinery ranks as the US’s third largest with a processing capacity of around 475,000 bbl/day.
In August, BP announced it agreed to sell its 266,000 bbl/day Carson refinery in California and related logistics and marketing assets to Tesoro for $2.5bn.
“Today’s announcement is the second major milestone in the strategic refocusing of our US fuels business,” said Iain Conn, chief executive of BP’s global refining and marketing business.
“Together with the sale of our Carson, California refinery, announced in August, the divestment of Texas City will allow us to focus BP’s US fuels investments on our three northern refineries, which are crude feedstock advantaged, and their associated marketing businesses," he added.
Marathon Petroleum will purchase the refinery, associated natural gas liquids pipelines, and four marketing terminals in the US southeast. BP said as part of the deal, it will also assign certain branded jobber contracts supplying approximately 1,200 retail sites in Tennessee, Mississippi, Alabama and Florida which could be supplied by the refinery.
Doug Sparkman, president of BP’s East of Rockies fuels business, said the sale will reduce BP's presence in the US southeast, adding a number of jobbers, companies that purchases large quantities of fuel from a refiner for distribution to gas stations, will be affected by the transaction, but did not go into detail.
BP said it would continue to invest in its three northern US refineries - the Whiting Refinery in Northwest Indiana, the BP Cherry Point Refinery in the state of Washington and the BP Husky joint venture near Toledo, Ohio.
($1 = €0.77)
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