HollyFrontier acquires Puget Sound refinery

HollyFrontier Corp. has announced that it has entered into a definitive agreement to acquire the Puget Sound refinery, the on-site cogeneration facility and related logistics assets, from Equilon Enterprises LLC d/b/a Shell Oil Products US (Shell) for a purchase price of US$350 million, plus hydrocarbon inventory to be valued at closing with an estimated current value in the range of US$150 – 180 million.

Mike Jennings, President and CEO of HollyFrontier commented, “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.”

The Puget Sound refinery is strategically located on approximately 850 acres in Anacortes, Washington, approximately 80 miles north of Seattle and 90 miles south of Vancouver. The 149 000 bpd facility is a large, high quality and complex refinery with catalytic cracking and delayed coking units and is well positioned geographically and logistically to source advantaged Canadian and Alaskan North Slope (ANS) crudes.

In addition to refining assets and an on-site cogeneration facility, the transaction includes a deep-water marine dock, a light product loading rack, a rail terminal, and storage tanks with approximately 5.8 million bbl of crude, product and other hydrocarbon storage capacity.

HollyFrontier expects to fund the acquisition with a one-year suspension of its regular quarterly dividend and cash on hand and expects the transaction to be immediately accretive to HollyFrontier’s earnings per share and free cash flow. HollyFrontier expects the transaction to close in the 4Q21, subject to regulatory clearance and other customary closing conditions. The HollyFrontier Board of Directors approved the one-year suspension of the regular quarterly dividend effective with the dividend to be declared for the 1Q21 and is expected to resume the dividend after such time.

Source: Tanks and Terminals