HollyFrontier to acquire Puget Sound Refinery and other assets from Shell
HollyFrontier has signed a deal worth up to $530 million for acquiring the Puget Sound Refinery in Anacortes, Washington from Royal Dutch Shell’s subsidiary Equilon Enterprises d/b/a Shell Oil Products US.
Also involved in the acquisition are the on-site cogeneration facility and related logistics assets, which include a deep-water marine dock, a rail terminal, a light product loading rack, and storage tanks with nearly 5.8 million barrels of crude, product, and other hydrocarbon storage capacity.
The consideration for the acquisition is $350 million plus hydrocarbon inventory, which has an estimated current value of $150-180 million.
The Puget Sound Refinery has a capacity of processing 149,000 barrels per day of crude oil. The oil refinery, which features catalytic cracking and delayed coking units, is said to be well placed geographically and logistically for sourcing advantaged crude oil from the Canadian and Alaskan North Slope.
The oil refinery in Anacortes produces various types of gasoline apart from fuel oil, jet fuel, diesel fuel, butane, propane, and petroleum coke. Additionally, it produces tetramer and nonene, which are chemicals used in a range of plastic products.
Mike Jennings – President and CEO of HollyFrontier said: “We are excited to announce the acquisition of the Puget Sound Refinery, an asset with a strong record of financial and operational performance. We believe that the Puget Sound Refinery will complement our existing refining business, with sales into premium product markets and advantaged access to Canadian crude.
“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.”
According to Shell, the sale of the Puget Sound oil refinery is part of its strategy to cut down its refinery footprint globally to core sites integrated with its trading hubs, chemicals factories, and marketing businesses.
Robin Mooldijk – Shell EVP for Manufacturing said: “This is another step towards reshaping our refining portfolio to drive resilient returns.
“HollyFrontier is a strong operator and we believe they will continue the refinery’s legacy of prioritizing safety, environmental performance and care for people at the site and within the community.”
The transaction, which is subject to regulatory clearance and other customary closing conditions, is expected to be wrapped up in Q4 2021.