Blue Dolphin mulls deal to buy idled Texas refinery
Blue Dolphin Energy Co. has purchased a 180-day option to acquire an idled refinery located in Ingleside, Texas, from Lazarus Energy Holdings (LEH), its largest shareholder. The refinery is currently owned by Lazarus Texas Refinery I, a wholly-owned subsidiary of LEH.
The refinery was constructed between 1978 and 1980 and was operated only intermittently thereafter. During its operating phase, the refinery had an operating capacity of approximately 40,000 bpd, producing naphtha, jet fuel, kerosene, diesel and fuel oil.
The refinery consists of crude oil and condensate processing equipment, pipeline connections, trucking terminals and related storage, as well as a barge dock and receiving facility, which gives the refinery access to the Gulf Intracoastal Waterway at Redfish Bay near Corpus Christi, Texas. An 8-in. active pipeline, approximately half a mile in length, connects the refinery to the barge dock.
Blue Dolphin also owns a refinery outside of Nixon, Texas, located in the Eagle Ford Shale play, which is currently running approximately 10,000 bpd of a light Eagle Ford crude oil (condensate).
"There is significant strategic value to the combined crude processing, transportation (as well as supply and distribution capabilities) of the refineries at Nixon and Ingleside," said Jonathan Carroll, Blue Dolphin''s CEO.
The Ingleside refinery sits on over 100 acres of land, including approximately 87 acres surrounding the Refinery on FM 2725 and approximately 15 acres with the barge dock. Initially, it had 31 aboveground storage tanks with a total capacity of 1,179,250 bbl. The refinery now has 210,000 bbl of storage capacity under a short-term lease and another 475,000 barrels of storage capacity that is being refurbished and should be completed and available for lease over the next several months.
The refinery requires refurbishment and recommissioning similar to the work conducted by Blue Dolphin at Nixon. All of the refinery''s tanks, vessels, pumps, piping, wiring, instrumentation and equipment will require inspection, repair and/or replacement prior to operation.
In addition, certain areas of the refinery require environmental remediation prior to operation. Blue Dolphin, should it exercise the option, will be required to reimburse LEH or Lazarus Texas Refinery I for the cost of any refurbishment, recommissioning or environmental remediation associated with the refinery.
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