PBF Energy buys Chalmette Refining from ExxonMobil

A large oil-refinery plant with gas storage tanks
Source: DollarPhotoClub

PBF Energy Inc. – a New-Jersey-based petroleum refiner and supplier of various petroleum products – has announced that it will purchase 100 percent of Chalmette Refining, LLC, which is a joint venture between affiliates of Petróleos de Venezuela, S.A. (PDVSA) and ExxonMobil. ExxonMobil held 50 per cent interest in the venture.

With the acquisition of the refinery and related logistics assets PBF will increase its total throughput capacity to over 725,000 barrels per day.

The agreement includes the Chalmette refinery and chemical production facilities near New Orleans, La. and ExxonMobile’s 100 per cent interests in MOEM Pipeline, LLC and 80 per cent interest in each of Collins Pipeline Company and T&M Terminal Company. ExxonMobil operates Chalmette Refining, LLC and Mobil Pipeline Company, an ExxonMobil affiliate, operates the logistics infrastructure.

The purchase price for the assets is $322 million, plus working capital including inventory to be valued at closing.

“This decision is the result of a strategic assessment of the site and how it fits with our large US Gulf Coast Refining portfolio,” said Jerry Wascom, president of ExxonMobil Refining & Supply Company.

“We regularly adjust our portfolio of assets through investment, restructuring, or divestment consistent with our overall global and regional business strategies,” said Wascom. “ExxonMobil remains committed to doing business in Louisiana through ongoing operations at the Baton Rouge refinery and chemical plants, the development and production of oil and natural gas resources, and sales of fuels and lubricants. All of these businesses are unaffected by this agreement.”

Tom Nimbley, PBF Energy’s Chief Executive Officer said: “The acquisition of the Chalmette Refinery, and its associated logistics assets, represents a significant step in the strategic growth of PBF Energy and PBF Logistics. Upon completion, we will have increased our refining capacity by 35 percent and added meaningful Gulf Coast assets to our businesses. We will have operations in the Gulf Coast, Mid-Continent and East Coast and have diversified and increased our commercial footprint and flexibility.”

“The PBF management team that the board has put in place has a proven track record of purchasing and integrating accretive acquisitions and chose the right opportunity in Chalmette to build on that track record at an attractive cost per complexity barrel,” commented PBF’s Executive Chairman Tom O’Malley.

The Chalmette Refinery, located outside of New Orleans, Louisiana, is a 189,000 barrel per day, dual-train coking refinery with a Nelson Complexity of 12.7 and is capable of processing both light and heavy crude oil. The facility is strategically positioned on the Gulf Coast with strong logistics connectivity that offers flexible raw material sourcing and product distribution opportunities, including the potential to export products.

Subject to regulatory approval, change-in-control is anticipated to take place by the end of 2015. Details of the commercial agreements are proprietary.

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