PBF Energy Inc. is planning to purchase a refinery from Exxon Mobil Corp, which is located on Torrance, California. The deal is valued at $537.5 million and came amid Exxon's companywide restructuring.
PBF Energy's purchase of Exxon's Torrance refinery follows the acquisition of Chalmette, Louisiana refinery, which Exxon owned jointly Petroleos de Venezuela, earlier this year. According to Reuters, the purchases are in line with PBF's Executive Chairman Tom O'Malley's vision to have PBF plants coast-to-coast.
Moreover, the purchase will give greater geographic diversity through expansion beyond its plants in New Jersey, Delaware, Ohio and Louisiana. It will also offer a huge opportunity to compete with Valero, Philips66 and other refiners with broad national presence. With the deal, PBF falls behind Phillips66 in its regional diversity since it has five major fuel markets refineries. PBF, on the other hand, will have four.
"Southern California is a very attractive market and we are excited to become a supplier in the region," Tom O'Malley said. Prior to his time in PBF Energy, he had previously served as CEO of refiners Premcor and Tosco, which is operating in California.
The Torrance plant fortifies PBF's first toe-hold in the well-profitable California market. And since the California market is isolated from other refined products supplies, the state's refineries produce most of the gasoline used there. Thus, a disruption at any California plant can cause prices to spike.
Meanwhile, the Torrance acquisition also includes storage facilities and pipelines which PBF will potentially be able to drop down into its Master-Limited Partnership for midstream assets.
The PBF-Exxon Mobil $537.5 million deal was announced on Wednesday and is expected to close in the second quarter of 2016 after repairs have been completed, Los Angeles Times has learned. The Fortune 200 company based in Parsippany, New Jersey also plans to offer all existing employees the opportunity to stay with the company, including contractors. PBF officials plan to meet with employees Thursday morning.
According to Exxon Mobil, the refinery has 700 employees and 700 contractors working there, The Weather Space noted.
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