ExxonMobil has sold its 63,000 bpd Billings Refinery to Par Pacific Holdings, Inc. in a $310 million sale that included associated marketing and logistics assets from ExxonMobil Corporation and two of its subsidiaries.
The sale includes Exxon- and Mobil-branded service stations network, supplied through long-term brand agreements. ExxonMobil has operated the refinery since 1949 and currently employs 300 people.
The deal is expected to close in the second quarter of 2023.
Par Pacific Holdings, Inc. headquartered in Houston, Texas, owns and operates energy, infrastructure, and retail businesses.
A Par Pacific spokesman said that they are looking at renewable fuel 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.
ExxonMobil’s president of Product Solutions, Karen McKee, explained that Exxon is focused on investing in facilities “where we can manufacture higher-value products such as lubricants and chemicals.”
Par Pacific’s strategy is to acquire and develop businesses in logistically complex, niche markets. “This acquisition will significantly enhance our scale and geographic diversification and underpins our focus on pursing strategic growth initiatives,” said William Pate, President and Chief Executive Officer of Par Pacific. “We look forward to welcoming the dedicated and highly skilled Billings employees to our team. This acquisition expands our fully integrated downstream network in the western United States.”
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 immediately begin adding to Adjusted Net Income and Free Cash Flow per share.
The 63,000 bpd Billings refinery is a high-conversion, complex refinery, which processes low-cost Western Canadian and regional Rocky Mountain crude oil grades. 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.
In addition to the refining assets, the transaction includes a 65% interest in an adjacent cogeneration facility and an expansive PADD IV & V marketing and logistics network. The logistics assets include the wholly-owned 70-mile, 55,000 bpd Silvertip Pipeline, a 40% interest in the 750-mile, 65,000 bpd Yellowstone refined products pipeline, and seven refined product terminals. Total storage capacity across the refinery and logistics locations totals 4.1 MMbbls. The acquisition also includes a long-term ExxonMobil-branded fuels marketing arrangement to supply approximately 300 retail locations.
Par Pacific owns and operates 61,000 bpd of combined refining capacity, related multimodal logistics systems, and 29 retail locations. Par Pacific owns one of the largest energy networks in Hawaii. In the Pacific Northwest and the Rockies, Par Pacific owns and operates 29 retail locations as well as 46-percent of Laramie Energy, LLC.