US-based Par Petroleum has signed an agreement with Tesoro to acquire Tesoro Hawaii for $75m in cash.
As part of the deal Par Petroleum will also pay $40m for three years based on certain performance metrics.
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Tesoro Hawaii has refining, retail and distribution assets located in Hawaii. The company will be operated as a separate wholly-owned subsidiary of Par Petroleum.
The sale includes a refinery which has a throughput capacity of about 94,000 barrels per day, 2.4 million barrels of crude oil and feedstock storage and 2.5 million barrels of refined products storage. Refined products produced at the location include ultra-low sulphur diesel, gasoline, jet fuel and marine fuel.
The company’s logistics assets include five refined products terminals, 27 miles of pipelines and a single point mooring terminal.
Tesoro Hawaii also has 31 retail outlets located in the islands of Oahu, Maui and Hawaii.
A total of 68,000 barrels of crude per day were produced by Tesoro Hawaii in 2012, which earned a gross refining margin of $174m. While 67,000 barrels of crude per day have been produced in the first quarter of 2013, with gross refining margin of $28m.
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By GlobalDataPar Petroleum board of directors chairman and CEO Will Monteleone said that the company has made a long-term investment in Hawaii’s economy.
"We have found in Tesoro Hawaii a great company with outstanding assets and a superb management team and employee base," he said.
"We aim to serve customers through operational excellence and enhance value for the communities we serve with a focus on safety, environmental stewardship and employee commitment."
The transaction, which is subject to certain closing conditions, is expected to be completed in the third quarter of 2013.
Image: Tesoro Hawaii has a refinery that can store 2.4 million barrels of crude oil. Photo: courtesy of Walter Siegmund.
