PBF Energy Inc. announced that its subsidiary completed the acquisition of Martinez refinery, and related logistics assets, from Equilon Enterprises LLC d/b/a Shell Oil Products US (the seller, or Shell).
With the acquisition, PBF's increased its total throughput capacity to more than one million barrels per day (bpd) and becomes the most complex independent refiner with a consolidated Nelson Complexity of 12.8. The purchase price for the assets was $960mn plus the value of hydrocarbon inventory.
In conjunction with the transaction, PBF has entered into market-based, crude oil supply and product offtake agreements with Shell. PBF financed the transaction with a combination of cash, including proceeds from its subsidiaries' $1bn private debt offering in January 2020, and borrowings under its existing revolving credit facility.
"We welcome Martinez's professional workforce to the PBF family," said PBF's chairman and CEO Tom Nimbley. "We are committed to maintaining the high operational standards of the refinery and, through continued safe, reliable and environmentally responsible operations, earning the privilege of being a respected member of the Martinez and Contra Costa County communities."
Nimbley continued: "The acquisition of Martinez is a significant strategic step for PBF as we expand our West Coast operations. Martinez is a top-tier asset, is a perfect complement to our existing assets and provides increased opportunities for PBF's West Coast operations to deliver value."
The 157,000bpd, dual-coking Martinez refinery is located on an 860-acre site in the City of Martinez, 30 miles northeast of San Francisco, California. The refinery is a high-conversion facility with a Nelson Complexity Index of 16.1, making it one of the most complex refineries in the United States.
The facility is strategically positioned in Northern California and provides for operating and other synergies with PBF's Torrance refinery located in Southern California. In addition to refining assets, the transaction includes a number of high-quality onsite logistics assets, including a deep-water marine facility, product distribution terminals and refinery crude and product storage facilities with approximately 8.8 million barrels of shell capacity.
PBF Energy and Shell have agreed to jointly move forward with reviewing the feasibility of building a proposed renewable diesel project, which would repurpose existing idled equipment at the Martinez refinery to create a renewable fuels production facility.
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