PBF to acquire Chalmette refinery in Louisiana from ExxonMobil, PdVSA

PBF Energy has signed a definitive agreement to purchase Chalmette Refining, LLC, consisting of the 189,000-bpd Chalmette refinery and related logistics assets, from ExxonMobil and PdVSA, officials announced on Thursday. 

With the acquisition, PBF will increase its total throughput capacity to over 725,000 bpd. The purchase price for the assets is $322 million, plus working capital including inventory to be valued at closing. 

PBF Energy says it does not expect to issue equity to finance any portion of this transaction. The transaction is expected to be approximately 20% accretive to 2016 consensus earnings in the first year of operation and is expected to close prior to year-end 2015, subject to customary closing conditions and regulatory approvals.

“The acquisition of the Chalmette refinery, and its associated logistics assets, represents a significant step in the strategic growth of PBF Energy and PBF Logistics," said Tom Nimbley, CEO of PBF Energy. "Upon completion, we will have increased our refining capacity by 35% and added meaningful Gulf Coast assets to our businesses. 

"We will have operations in the Gulf Coast, Mid-Continent and East Coast and have diversified and increased our commercial footprint and flexibility," he continued. "We are committed to the continued safe and environmentally responsible operations of the facility and look forward to welcoming Chalmette’s well-trained and professional workforce to the PBF family.”

The Chalmette refinery, located outside of New Orleans, Louisiana, is a 189,000-bpd, dual-train coking refinery with a Nelson Complexity of 12.7 and is capable of processing both light and heavy crude oil. 

The facility is strategically positioned on the US Gulf Coast with strong logistics connectivity that offers flexible raw material sourcing and product distribution opportunities, including the potential to export products.

In addition to refining assets, the transaction includes 100% ownership of the MOEM Pipeline, providing access to the Empire Terminal, as well as the CAM Connection Pipeline, providing access to the LOOP facility through a third-party pipeline. The transaction also includes 80% ownership in each of the Collins Pipeline Co. and T&M Terminal Co., both located in Collins, Mississippi, which provide a significant clean products outlet for the refinery via the Plantation and Colonial Pipelines. 

Also included in the transaction are a marine terminal capable of importing waterborne feedstocks and loading or exporting finished products; a clean products truck rack which provides access to local markets; and a crude and product storage facility with approximately 7.5 million bbl of shell capacity. 

PBF estimates the acquired MLP-qualifying pre-tax earnings from the logistics assets of Chalmette Refining to be at least $30 million.