Shop Around, Part 2 - The Refineries on the Block in the Western U.S.

Over the weekend, PBF Energy closed on its acquisition of Shell’s Martinez, CA, refinery, marking the first completed U.S. refinery transaction of 2020. The closure of that deal may seem unremarkable, but it’s rare for more than two to three transactions involving individual refineries to take place in the U.S. in a given year, and there are as many as eight other refineries on the market. These include two each in the Philadelphia area, the Midcontinent and the Rockies, and one each in Washington state and Alaska. Why are so many refineries on the block? Today, we continue our series with a look at the facilities said to be on the market in PADDs 4 and 5.

As we said in Part 1 of this two-part blog series, all but a handful of the 135 refineries in the U.S. were built prior to 1970 – some as early as the late 1800s. For a variety of reasons, the best of these facilities tend to operate for long periods of time without frequent changes in ownership. Since 2013, excluding mergers and spinoffs of companies, an average of ~2 refinery transactions have taken place per year. In Part 1, we focused on the refineries for sale in PADDs 1 and 2. These included the two Philadelphia-area refineries looking for buyers: (1) Philadelphia Energy Solutions’ 335-Mb/d, fire-damaged PES facility, which has since announced a potential acquisition by Hilco Redevelopment Partners, and (2) Delta Air Lines’ subsidiary Monroe Energy’s 185-Mb/d refinery in Trainer, PA. We also discussed two Midcontinent-area refineries owned by CVR Energy: the 132-Mb/d Coffeyville, KS, refinery and the 75-Mb/d Wynnewood, OK, plant.

Today, we turn our attention to four refineries located farther west. We begin with two in the Rockies:

• ExxonMobil is reportedly shopping its 60-Mb/d Billings, MT (bright green rectangle with dashed outline and dot in Figure 1), refinery to potential buyers. The refinery was built by Carter Oil Co. in 1949 and was eventually folded into the ExxonMobil umbrella through legacy companies such as Standard Oil and Humble Oil.
• Marathon Petroleum Corp. (MPC) is said to be evaluating a potential sale of its 61-Mb/d Salt Lake City, UT, refinery (dark green rectangle with dashed outline and dot). MPC has owned the refinery since the company’s 2018 merger with Andeavor (formerly known as Tesoro Corp.). Andeavor/Tesoro had owned the refinery since 2001, when it acquired the facility from BP.