Hawaii Pacific Energy LLC, a subsidiary of Houston-based Par Petroleum Corp., has finalized its acquisition of Tesoro Hawaii LLC from Tesoro Corp. for $75 million in cash plus market value of net working capital and a contingent earnout payment of up to $40 million.
The acquired assets include the 94,000 b/d Kapolei refinery; storage capacity for 2.4 million bbl of oil and 2.5 million bbl of refined products; and related logistics assets, including five refined product terminals, 27 miles of pipelines, and a single-point mooring terminal. In addition, HPE has rights to sell gasoline through a network of 31 Tesoro-branded retail stations in Hawaii. Tesoro Hawaii, which will be renamed Hawaii Independent Energy LLC, will operate as a separate wholly owned subsidiary of Par Petroleum and will be headquartered in Oahu.
The Kapolei refinery produces gasoline, jet fuel, high-sulfur diesel, and high- and low-sulfur fuel oil. It also is a major supplier of ultralow-sulfur diesel to the Hawaiian Islands. Major process units include crude distillation, vacuum distillation, hydrocracking, naphtha hydrotreating, reforming and visbreaking. The refinery is in the Campbell Industrial Park in Kapolei, 20 miles west of Honolulu.
Tesoro reported its intentions to sell its interest in the Hawaii facility to the Par Petroleum unit in June (OGJ Online, June 19, 2013). Earlier that month, Tesoro closed on its acquisition of BP PLC’s 266,000-b/d Carson refinery near Los Angeles for a little more than $1 billion for refining and marketing assets and $1.35 billion for inventory and other working capital (OGJ Online, June 3, 2013; May 17, 2013).