Par Pacific Holdings Inc., Houston, agreed to acquire the Billings refinery and certain associated midstream assets in Montana and Washington from ExxonMobil Corp. and two of its subsidiaries for $310 million plus hydrocarbon and other inventory to be valued at closing, the companies said in separate statements Oct. 20.
Through the deal, Par Pacific expands its fully integrated downstream network in the western US and increases total throughput capacity to about 218,000 b/d.
The 63,000 b/d Billings refinery is a high-conversion, complex refinery, which processes Western Canadian and regional Rocky Mountain crude oil. Par Pacific is evaluating renewable fuels opportunities to supplement the refinery’s conventional fuel production and utilize its existing market position in Washington to reduce the carbon intensity of its fuel sales in accordance with the recently enacted Washington low-carbon fuel standard, the company said. The state aims to cut auto emissions numbers by 20% by 2038.
In addition to the refining assets, the transaction includes a 65% interest in an adjacent cogeneration facility and a PADD IV & V marketing and logistics network that includes the wholly-owned 70-mile, 55,000 b/d Silvertip pipeline, a 40% interest in the 750-mile, 65,000 b/d Yellowstone refined products pipeline, Yellowstone Energy LP, and seven refined product terminals. Total storage capacity across the refinery and logistics locations is 4.1 million bbls. The deal also includes a long-term ExxonMobil-branded fuels marketing arrangement to supply about 300 retail locations.
Par Pacific expects over $30 million in commercial and cost synergies through the deal. Employees directly supporting the assets will be offered positions at Par Pacific, the companies noted.
Par Pacific expects to fund the acquisition with cash on hand and availability under existing credit facilities, based on liquidity of approximately $495 million on September 30, 2022. Hydrocarbon inventory is expected to be financed by a new working capital facility. The transaction is expected to close in second-quarter 2023, subject to customary closing conditions.
