HollyFrontier completes acquisition of Shell refinery
HollyFrontier Corporation has completed the previously announced acquisition of the Puget Sound Refinery, the on-site cogeneration facility and related logistics assets, from Equilon Enterprises LLC d/b/a Shell Oil Products US, for an aggregate cash consideration of USD613.6 million.
The purchase price consists of a base cash purchase price of USD350.0 million, hydrocarbon inventory with an estimated closing value of approximately USD266.2 million and other closing adjustments and accrued liabilities of USD2.6 million. HollyFrontier expects the transaction to be immediately accretive to HollyFrontier’s earnings per share and free cash flow.
Shell will retain product offtake agreements to support its existing retail marketing business in the U.S. Pacific Northwest. Shell’s off-site logistics assets are excluded from the sale.
Headquartered in Dallas, Texas, U.S.A., HollyFrontier is an independent petroleum refiner and marketer that produces high value light products such as gasoline, diesel fuel, jet fuel and other specialty products. HollyFrontier owns and operates refineries located in Kansas, Oklahoma, New Mexico, Washington and Utah and markets its refined products principally in the Southwest U.S., the Rocky Mountains extending into the Pacific Northwest and in other neighboring Plains states. In addition, HollyFrontier produces base oils and other specialized lubricants in the U.S., Canada and the Netherlands, and exports products to more than 80 countries.
Acquisition complements HollyFrontier’s existing refining business
“The Puget Sound Refinery has a strong record of financial and operational performance that we believe will complement our existing refining business. The refinery supplies transportation fuels into the premium Pacific Northwest region and sources advantaged Canadian crude, further enhancing our refining asset base. We are committed to the continued safe and environmentally responsible operations of the facility and welcome Puget Sound’s highly skilled workforce to the HollyFrontier family,” said Mike Jennings, president and CEO of HollyFrontier.
The Puget Sound Refinery is strategically located on approximately 850 acres in Anacortes, Washington, approximately 80 miles north of Seattle and 90 miles south of Vancouver. The 149,000 barrel per day facility is a large, high quality and complex refinery with catalytic cracking and delayed coking units and is well positioned geographically and logistically to source advantaged Canadian and Alaskan North Slope (ANS) crudes.
In addition to refining assets and an on-site cogeneration facility, the transaction includes a deep-water marine dock, a light product loading rack, a rail terminal, and storage tanks with approximately 5.8 million barrels of crude, product and other hydrocarbon storage capacity.
HollyFrontier was represented by Morgan Lewis & Bockius LLP, Wachtell, Lipton, Rosen & Katz and Marten Law LLP in this transaction.