Paramount Petroleum to buy California refinery

Paramount Petroleum Corp. plans to buy a closed Bakersfield, Calif., refinery from Flying J Inc., and its subsidiary Big West of California LLC, for $40 million, subject to approval from a bankruptcy court.

By OGJ editors
HOUSTON, Feb. 17
-- Paramount Petroleum Corp. plans to buy a closed Bakersfield, Calif., refinery from Flying J Inc., and its subsidiary Big West of California LLC, for $40 million, subject to approval from a bankruptcy court.

The refinery, which has a 65,000 b/cd capacity, supplies diesel and gasoline to California. It was shut down for lack of cash with which to buy oil (OGJ, Feb. 9, 2009, Newsletter).

Paramount, a subsidiary of Alon Energy USA Inc., agreed to pay $40 million plus the fair market value of inventory. Clean Fuels project equipment and a 250-acre buffer property were excluded from the transaction. The agreement also includes an assumption of environmental clean up obligations.

Flying J is based in Ogden, Utah. The Bakersfield refinery closure did not affect Flying J’s 30,000 b/cd capacity refinery in Salt Lake City, the company said.

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