Marathon Petroleum to buy BP's Texas City refinery

Marathon Petroleum Corp. has signed a definitive agreement to buy BP PLC’s 451,000-b/cd Texas City, Tex., refinery and related assets for as much as $2.5 billion.

The sale of the high-conversion refinery is part of a strategy BP disclosed early last year to cut its US refining capacity by half (OGJ Online, Feb. 1, 2011). As part of that strategy, it agreed in August to sell its 251,000-b/d refinery in Carson, Calif., to Tesoro Corp. (OGJ Online, Aug. 13, 2012).

When it announced that strategy, BP said any transaction involving the Texas City refinery would be negotiated to fulfill regulatory obligations associated with the Mar. 23, 2005, explosion and fire that killed 15 people and injured 170 others.

Marathon will pay a base purchase price of $598 million and an estimated $1.2 billion for inventories. Under an earn-out provision, Marathon could pay as much as an additional $700 million over 6 years.

In addition to the refinery, the agreement covers three intrastate NGL pipelines linked to the facility, an allocation of BP’s Colonial Pipeline Co. shipper history, four terminals, retail marketing contract assignments for about 1,200 branded sites, and a 1,040-Mw cogeneration facility.

According to Oil & Gas Journal’s 2011 Worldwide Report, the Texas City refinery has major processing capacities including 29,700 b/cd of delayed coking, 163,800 b/cd of fluid catalytic cracking, 124,200 b/cd of cyclic catalytic reforming, 54,000 b/cd of catalytic hydrocracking for distillate upgrading, 63,000 b/cd of hydrocracking for resid upgrading, and 409,000 b/cd of various catalytic hydrotreating (OGJ, Dec. 5, 2011, p. 30).

BP said it has divested assets worth $35 billion since the beginning of 2010 and expects the total to reach $38 billion by the end of 2013.

Related Articles

Market watch: Energy futures prices rose slightly Friday

05/06/2002 Crude oil futures prices rose slightly Friday amid lingering uncertainty about a possible disruption of Middle East supplies, although tensions in ...

Gulf of Mexico oil service sector showing signs of an upturn

05/06/2002 The Gulf of Mexico oil service sector is experiencing the signs of an upturn, analysts with Simmons & Co. International, UBS Warburg LLC, and RBC D...

OTC: Industry, national agencies need to work together to make FPSOs work in the gulf

05/06/2002 Over the coming years, the oil and gas industry will have to keep an open line of communication with national agencies such as the US Coast Guard a...

Market watch: Energy futures prices fall as Iraq lifts embargo

05/07/2002 Crude oil futures prices fell Monday after Iraq announced plans to lift a self-imposed export embargo with exports expected to resume by Wednesday.

Careers at TOTAL

Careers at TOTAL - Videos

More than 600 job openings are now online, watch videos and learn more!

 

Click Here to Watch

Other Oil & Gas Industry Jobs

Search More Job Listings >>
Stay Connected