Par Pacific Holdings Inc. has concluded its acquisition of Exxon Mobil Corp.’s refinery in Billings metropolis in Montana state, together with logistics infrastructure from the related ExxonMobil associates.
The divestment, introduced October 2022, contains the Silvertip pipeline, ExxonMobil’s 40 p.c stake within the Yellowstone pipeline and Yellowstone Power LP, and ExxonMobil’s pursuits in product terminals in Montana and Washington.
The Billings refinery can produce as much as 63,000 oil barrels per day (bpd), processing crude from western Canada and the Rocky Mountain. Storage capability throughout the acquired property totals 4.1 million barrels, in response to Par Pacific.
New York-listed Par Pacific paid the bottom worth of $310 million with money available whereas it used borrowing on the related hydrocarbon stock, it mentioned in a press launch final week.
“This acquisition considerably enhances our scale and geographic diversification”, Par Pacific chief govt William Pate mentioned within the announcement. “We count on the transaction to be instantly accretive to our earnings and money circulation”.
“The Billings Acquisition enhances the corporate’s current Pacific Northwest market place”, Par Pacific mentioned. It already has refineries in Washington and Wyoming, in addition to Hawaii.
The Houston city-based power transporter, refiner and retailer targets to lift the Billings refinery’s throughput and reliability towards capability.
Par Pacific mentioned it’s also “evaluating renewable fuels alternatives to complement the Billings refinery’s standard gas manufacturing and make the most of its current market place in Washington to scale back the carbon depth of its gas gross sales in accordance with the just lately enacted Washington low-carbon gas normal”.
The association contains an settlement for Par Pacific to proceed supplying about 250 ExxonMobil model retail stations.
Par Pacific logged 1.491 million bpd in refined product gross sales quantity for the primary quarter, when it reported $237.89 million in internet earnings. It had a petroleum refining capability of 154,000 bpd, storage capability of 9 million barrels, 119 retail places within the Pacific Northwest and Hawaii, and 179 miles of pipeline as of the interval, in response to its web site.
Fossil Gasoline Wind-Down
ExxonMobil’s divestment to Par Pacific is amongst successive gross sales involving its fossil gas enterprise. In a deal anticipated to shut mid-2023, it has transferred its gas manufacturing property in Italy to native firm Italiana Petroli SPA, as introduced by its Italian unit December 20. ExxonMobil can also be disposing of its 65.99 p.c stake in Esso Thailand PCL to Thai firm Bangchak Corp. PCL, anticipated to conclude within the second half of this yr, as introduced by ExxonMobil January 11. The Thailand transaction entails ExxonMobil distribution terminals and retail stations, in addition to its Sriracha Refinery.
ExxonMobil has spared its lubricants and chemical substances enterprise in each international locations.
The gross sales come amid comparable strikes by world power giants towards the backdrop of worldwide clamor for clear power. The likes of BP PLC and Shell PLC have included refining operations of their decarbonization methods towards internet zero by 2050.
“For a lot of the Majors, some additional divestment of non-core property is fascinating”, Wooden Mackenzie analyst Alan Gelder wrote February 13.
“ExxonMobil has a variety of refinery-only websites that don’t match with its long-term technique. BP is down to 6 refineries however must do away with a minimum of another to fulfill its 2030 purpose to scale back refinery capability. Shell has recognized 5 key petrochemically built-in property and must divest others. TotalEnergies might select to promote its remaining standalone refineries fairly than convert them to bio-sites. And Chevron nonetheless owns websites which weaken its strategic deal with downstream decarbonization”.
However an absence of consumers and powerful refining income might decelerate such divestments, he mentioned.
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