Tesoro to buy BP's Carson, Calif., refinery

By OGJ editors

Tesoro Corp. will buy BP’s 266,000-b/d Carson refinery adjacent to its 97,000-b/d Wilmington refinery south of Los Angeles in a deal estimated to be worth $2.5 billion.

The buyer said integration of the high-conversion refinery and related facilities with its existing system would create synergies through integrated supply, enhanced optimization of intermediate feedstocks and product distribution costs, improvements in light-product yields, and reduced manufacturing costs and stationary-source air emissions.

“The combined and reconfigured operations are expected to drive annual synergies of approximately $250 million with an additional capital investment of approximately $225 million,” Tesoro said in a press statement.

BP announced early last year that the Carson refinery and its 451,000-b/d Texas City, Tex., were for sale (OGJ Online, Feb. 1, 2011). The company plans to focus its US fuels business on its refineries in Cherry Point, Wash.; Whiting, Ind.; and Toledo, Ohio.

The purchase price for the Carson refinery includes $1.175 billion for facilities and inventory with a current value of $1.3 billion. The deal, subject to regulatory approvals, is expected to close before mid-2013.

According to OGJ’s annual Worldwide Report, the refinery has 60,390 of delayed coking, 91,800 b/d of fluid catalytic cracking, 47,700 b/d of semiregenerative catalytic reforming, and 45,000 b/d of distillate hydrocracking capacity (OGJ, Dec. 5, 2011, p. 30).

BP acquired the refinery in its 2000 takeover of ARCO.

In the new deal, Tesoro will acquire associated pipelines and storage terminals and the ARCO-branded retail marketing network in southern California, Arizona, and Nevada, which includes 800 dealer-operated sites.

Tesoro also will acquires a 51% stake in a 400-Mw, gas-fired cogeneration facility that supplies electricity to the refinery and local grid, and a 350,000-tonne/year integrated anode coke calcining operation.

Tesoro will acquire and exclusively license to BP the ARCO retail brand rights for northern California, Oregon, and Washington. BP will retain ownership of the “ampm” convenience store brand and franchise it to Tesoro for use in the US Southwest.

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