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Friday, September 02, 2011

Valero buying Murphy Oil refinery in Louisiana - San Antonio Business Journal 9.2.2011

Valero buying Murphy Oil refinery in Louisiana

Date: Friday, September 2, 2011, 10:11am CDT
Valero Energy Corp. has agreed to buy Murphy Oil USA Inc.’s refinery in Meraux, La., and related logistics assets for $325 million, plus inventories currently estimated at $300 million.

Valero’s management is expected to be accretive to earnings upon closing. The company plans to fund the transaction from available cash. The transaction is expected to close in the fourth quarter of 2011. This will be the company’s 16th refinery.

The Meraux refinery has a total throughput capacity of 135,000 per day and has the ability to process medium sour crude and produce premium refined products. The refinery has a loading dock along the Mississippi River and is located 40 miles from Valero’s St. Charles refinery. The purchase price also includes an adjacent product terminal, a 20 percent equity interest in the Collins pipeline and T&M terminal and a 3.2 percent interest in the Louisiana Offshore Oil Port.

“Our plan is to integrate feedstocks and refined product blending with the St. Charles refinery, especially as our new 60,000 bpd hydrocracker is completed at St. Charles,” says Valero Chairman and CEO Bill Klesse. “The Meraux refinery adds more hydroprocessing capacity to our portfolio. It’s the right hardware in the right place.”

Valero (NYSE: VLO) in an international manufacturer and marketer of transportation fuels, other petrochemical products and power.

Murphy Oil USA is a subsidiary of El Dorado, Ark.-based Murphy Oil Corp. (NYSE: MUR).
“The announcement of the sale of Meraux is another execution step in our repositioning strategy to exit the refining business,” Murphy’s President and CEO David M. Wood says. “We will now focus our attention on completing the sale of our assets in the U.K.”
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