The resulting exploration and production company will focus on oil and gas worldwide, while the downstream company will focus on refining and marketing, primarily in the US although ConocoPhillips has some downstream operations abroad.
In September, ConocoPhillips put up for sale its 185,000 b/d refinery in Trainer, Pa., and associated pipelines and terminals and began immediately to idle the plant and permanently close it in 6 months if it could not sell it.
In yet another corporate move in US refining, HollyFrontier Corp. in July completed the merger of Holly Corp. and Frontier Oil Corp. HollyFrontier has a refining capacity of more than 440,000 b/d across five refineries, says the new company, and serves the Midcontinent, Rocky Mountain, and southwestern refining markets with access to growing regional domestic and Canadian crude oil supplies.
The newly formed company has its headquarters in Dallas and produces light products such as gasoline, diesel fuel, jet fuel, and other specialty products. Through its subsidiaries, HollyFrontier operates a 100,000-b/sd refinery in Artesia, NM, a 125,000-b/sd refinery in Tulsa, a 31,000-b/sd refinery in Woods Cross, Utah, a 135,000-b/sd refinery in El Dorado, Kan., and a 52,000-b/d refinery in Cheyenne, Wyo.
A subsidiary of HollyFrontier also owns a 34% interest (including general partner) in Holly Energy Partners LP, which in November agreed to acquire pipelines and other logistical properties at HollyFrontier's El Dorado and Cheyenne refineries for $340 million.
At closing, the companies will enter into 15-year throughput agreements with minimum annual revenue commitments by HollyFrontier, from which Holly Energy expects additional revenue of $47 million/year, according to the announcement.
At HollyFrontier's 150,000-b/d El Dorado refinery, the transaction covers storage tanks with 3.7 million bbl of total capacity, a truck-loading rack for oil products, and another rack for propane, and related product pipeline connections.
Properties covered by the deal at the 52,000-b/d Cheyenne refinery include 1.8 million bbl of storage tanks, a products-loading rack, two propane-loading spots, three crude oil lease automatic custody transfer units, and a crude oil receiving pipeline.
In March, Toledo Refining Co. LLC, a wholly owned subsidiary of PBF Holding Co. LLC, completed its $400-million purchase of Sunoco Inc.'s 170,000-b/d refinery in Toledo, Ohio. The high-conversion refinery processes mainly light, sweet crudes from the US Midcontinent and Canada (OGJ, Mar. 7, 2011, Newsletter).
In April, NuStar Energy LP, San Antonio, closed on the purchase of a small San Antonio refinery in a deal linked to the nearby Eagle Ford shale play. NuStar bought the 14,500-b/d refinery from AGE Refining, which entered bankruptcy in February 2010, for $41 million (OGJ, Apr. 25, 2011, Newsletter).
Despite the corporate activity, much of which amounts to lateral shifting with little effect on refining capacity, there are some expansions in progress or planned for US refineries.
In first-quarter 2011, Valero Energy Corp. announced it would expand crude-unit capacity at its McKee refinery in Sunray, Tex., by 25,000 b/cd to increase total capacity to 195,000 b/cd. West Texas Intermediate crude oil from Midland, Tex., will supply the additional oil after the scheduled expansion is completed in 3 years, Valero said.
In March, Tesoro Corp. said it would expand crude capacity at its 58,000-b/d refinery at Mandan, ND, to 68,000 b/d to handle oil from the Bakken shale and elsewhere in the Williston basin. The company expected to invest about $35 million in the expansion.
Processing capacities at the refinery include 25,700 b/d of fluid catalytic cracking and 11,500 b/d of cyclic catalytic reforming. Average throughput over the past 3 years, said the company, has been 52,000 b/d.
In Texas, Motiva Enterprises LLC let a contract to Roberts & Schaefer, a subsidiary of KBR, for construction of a petroleum coker material-handling system in the expansion of its 285,000-b/d refinery at Port Arthur, Tex.
The expansion includes a new single-train crude distillation unit with capacity of 325,000 b/d. Other new units include an 85,000-b/d catalytic reformer with associated isomerization and hydrotreating plants, sulfur recovery, a 75,000-b/d hydrocracker integrated with a new 60,000-b/d diesel hydrotreater, and a 50,000-b/d hydrotreater for feed for the existing catalytic cracker (OGJ Online, Mar. 18, 2009).
When the expansion is complete early in 2012, the refinery will have distillation capacity exceeding 600,000 b/d and become the largest in the US.