Purchase of BP's Texas City Refinery and Related Assets Closes

abarrelfullabarrelfull wrote on 03 Feb 2013 21:09
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Marathon Petroleum Corporation (NYSE: MPC) today announced that it has closed the transaction with BP to purchase several assets, including a 451,000 barrel per calendar day refinery located in Texas City, Texas. The refinery will be renamed and referred to in future MPC communications as the Galveston Bay refinery. Additionally, the transaction includes a 1,040 megawatt cogeneration facility, four light product terminals located in the Southeast, retail marketing contract assignments for approximately 1,200 branded sites representing approximately 61,000 barrels per day (bpd) of gasoline sales, three operating intrastate natural gas liquids pipelines originating at the refinery and a 50,000 bpd allocation of BP's Colonial Pipeline Company shipper history.

The transaction was initially announced on Oct. 8, 2012. The base purchase price is approximately $598 million, plus inventories valued at approximately $1.1 billion. The agreement also contains an earnout provision under which MPC could pay up to an additional $700 million over six years, subject to certain conditions. The transaction is expected to be accretive to earnings in the first year of operation.

"This is a unique opportunity to acquire, at an attractive price, a world-scale refinery on the western Gulf Coast that is well positioned to benefit from the growing supply of North American crude oil," said MPC President and Chief Executive Officer Gary R. Heminger. "The refinery and related assets should enhance our current footprint by integrating well with our existing operations. This transaction will provide MPC the opportunity to grow in contiguous markets, expand our export opportunities and further optimize our Gulf Coast operations. We believe this transaction will create long term value for our shareholders."

"As our history has shown, our focus will remain on the safe and environmentally responsible operations of all of our facilities. We look forward to providing quality products and services to meet the needs of our new branded jobbers. We welcome all of our new employees at the Galveston Bay refinery and product terminals," said Heminger.

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