Parsippany-based PBF Energy Inc. announced that its subsidiary has signed a definitive agreement to purchase the 157,000 barrel-per-day Martinez refinery, and related logistics assets, from Equilon Enterprises LLC d/b/a Shell Oil Products US. With the acquisition, PBF’s total throughput capacity will increase to over one million barrels per day and its refining system will have a consolidated Nelson Complexity of 12.8.
Based on timing of close, the upfront acquisition price will be between $900.0 million and $1.0 billion. In addition to the upfront consideration, there are a number of unique transaction terms that drive incremental value for PBF and reduce our invested capital. Notably, direct and indirect first quarter 2020 turnaround costs and certain additional future capital expenses will be funded by the Seller. The value of working capital will be determined at closing. The Martinez transaction is expected to close in the second half of 2019, subject to customary closing conditions and regulatory approvals.
“The acquisition of the high-complexity, dual-coking Martinez refinery is a significant strategic step for PBF as we expand our West Coast operations and increase our total throughput capacity to more than one million barrels per day,” said PBF Chairman and Chief Executive Officer Tom Nimbley. “Martinez is one of the most complex refineries in the country and a top-tier asset. This acquisition will provide increased opportunities for PBF’s expanding West Coast operations to deliver enhanced value and returns in the favorable markets ahead including tangible synergies for our two-refinery West Coast system. We look forward to welcoming Martinez’s highly-motivated and professional workforce to the PBF family, and are committed to continuing their tradition of safe, reliable, environmentally responsible operations, as well as their outstanding community partnership.”
The 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 157,000 barrel per day, dual-coking 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.
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