By OGJ editors
HOUSTON, Jan. 29 -- Tesoro Corp. agreed to buy the 100,000 b/cd Wilmington refinery south of Los Angeles and its products terminal from Shell Oil Products US.
The transaction also includes 250 retail sites in and around Los Angeles and San Diego. Total purchase price is expected to be $1.63 billion, plus the value of oil inventory at closing, Tesoro said.
Tesoro plans to spend at least $1.1 billion in 5 years on improvements and maintenance at the sour heavy crude refinery.
The proposed sale is part of Shell's strategy to streamline its downstream assets. The transaction is expected to close in midyear, subject to regulatory approvals.
The refinery began operations in 1923 as California Petroleum Corp. Shell acquired a stake through a joint venture in 1998 and became sole owner in 2002.
Tesoro said it plans to offer employment to most, if not all, of about 500 affected Shell employees at the refinery and terminal and certain employees within Shell's retail organization.
Some supply contracts that Shell has with its wholesalers and open dealers in the area will be assigned to Tesoro.