Alon USA Partners (Alon Partners) has agreed to acquire Alon USA Energy’s (Alon Energy) Krotz Springs refinery in Louisiana for $437.5m.
Alon Energy has agreed to repay the capital expenditures associated to the proposed maintenance turnaround of the refinery in 2015.
Alon Partners will complete the transaction in a combination of $100m cash and $337.5m in common units representing limited partner interests in Alon Partners.
The transaction is expected to be completed on or about 28 November 2014.
Alon Partners and Alon Energy president and chief executive officer Paul Eisman said: "The Krotz Springs refinery drop down should provide a significant increase in Adjusted EBITDA for Alon Partners.
"Alon Energy’s Krotz Springs refinery is well positioned to generate significant free cash flow, and this transaction unlocks the value of that business. This is a very positive step for the continued success of both Alon Partners and Alon Energy."
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By GlobalDataLocated on the Atchafalaya River in central Louisiana, the refinery has a throughput capacity of 74,000 barrels per day and a Nelson Complexity of 8.3.
The refinery is capable of processing several volumes of low sulfur, or sweet, crude oils to produce a high percentage of light, high-value refined products.
It has direct access to the Colonial product pipeline system, which enables distribution of products to markets across the Southern and Eastern US and along the Mississippi and Ohio Rivers.
