By OGJ editors
HOUSTON, Dec. 30 -- Sunoco Inc., Philadelphia, said Tuesday that it received Federal Trade Commission approval to buy the Eagle Point refinery from El Paso Corp., Houston.
Subsequently, the two companies signed an agreement outlining a price of $111 million, plus fair market value for inventories and certain assumed liabilities at time of closing. The companies expect to finalize the deal by mid-January.
In April, a letter of intent listed the purchase price at $130 million (OGJ Online, Apr. 30, 2003). Prudential Securities Inc. analyst Andrew Rosenfeld of New York said Sunoco agreed to assume certain environmental liabilities in exchange for lowering the purchase price. Otherwise, terms of the deal remained unchanged, he said.
The deal involves the 150,000 b/d refinery in Westville, NJ. Sunoco Logistics Partners LP, a master limited partnership of which Sunoco Inc. owns 75%, is expected to acquire the pipeline and logistics assets included in the transaction.
Sunoco also signed an option to purchase El Paso's share of the Harbor pipeline, which connects the refinery to regional distribution systems.
Eagle Point refinery is across the Delaware River from Sunoco's 175,000 b/d Marcus Hook and 330,000 b/d Philadelphia refineries.
Sunoco Chairman and CEO John G. Drosdick said, "The Eagle Point refinery will expand our total refining capacity by 20%, integrate well with our other [US] Northeast refining operations, and should be positioned to make a significant contribution to our results in 2004."
El Paso acquired these assets through its $24 billion merger with The Coastal Corp. (OGJ Online, Jan. 29, 2001). The Eagle Point sale supports El Paso's previously announced plan to divest noncore businesses.
This sale supports El Paso's long-range plan to reduce the company's total debt to $15 billion by Dec. 31, 2005 (OGJ, Dec. 22, 2003, p. 40).