Exxon promoting Montana oil refinery to Par Pacific in $310 million deal By Reuters

By Erwin Seba

HOUSTON (Reuters) -Exxon Mobil Corp on Thursday agreed to promote its Billings, Montana, refinery and associated pipeline properties to Par Pacific Holdings (NYSE:) Inc for $310 million.

The sale ends a years-long effort by the U.S. oil large to additional scale back its refining footprint and focus manufacturing on crops alongside the U.S. Gulf Coast and within the Midwest. It additionally has been promoting oil producing properties to spice up returns.

“ExxonMobil (NYSE:) is targeted on investing in services the place we will manufacture higher-value merchandise comparable to lubricants and chemical compounds,” stated Karen McKee, the pinnacle of the oil firm’s product options unit.

The deal for the 63,000-barrel-per-day refinery is predicted to shut within the second quarter of 2023, Exxon stated in a press release.

Par Pacific was considered one of a number of impartial refiners eying the plant and trying to make investments a few of this 12 months’s document refining income to broaden its belongings, in line with individuals conversant in the matter.

Revenue margins for processing crude into gasoline, diesel and jet gasoline hit five-year highs in the US earlier this 12 months, serving to the gross sales enchantment. Rising journey and fewer refineries from pandemic-shutdowns have pushed the typical U.S. gasoline retail worth to $3.84 a gallon this week, up from $3.36 a 12 months in the past.

Included within the sale are the Silvertip Pipeline, Exxon’s curiosity within the Yellowstone Pipeline and Yellowstone Power LP and its pursuits in merchandise terminals in Montana and Washington.

“This acquisition expands our absolutely built-in downstream community within the western United States,” stated Par Pacific Chief Government Officer William Pate.

Since 2013, Houston-based Par Pacific has bought refineries in Hawaii, Wyoming and Tacoma, Washington.

Par Pacific shares jumped 8.7% to $21.62 on Thursday, their highest degree in two and a half years.

“The acquisition advantages Par’s credit score profile as a result of it will increase scale and diversification and might be funded inside current liquidity,” credit standing service Moody’s (NYSE:) stated.

Par stated it might pay for the Billings buy with money readily available and current credit score traces.

Below the deal, Par Pacific will proceed supplying gasoline to Exxon and Mobil-branded stations within the area.

For the Billings refinery’s 300 staff, together with 150 staff represented by the United Steelworkers union (USW), the information of the sale settlement ends worries a few attainable closure of the plant.

U.S. refining capability has fallen by 1 million bpd since 2019, primarily due to plant closures amid decreased demand following lockdowns through the COVID-19 pandemic.