Texan group buys Chevron Pembroke refinery
14 Mar 2011
Pembroke, UK – Valero Energy Corp. of San Antonio, Texas, is to acquire Chevron’s Pembroke refinery in Wales for $730 million. The deal, which includes marketing and logistics assets in the UK and Ireland. is to close in the third quarter of 2011, subject to regulatory approvals.
The purchase includes stakes in four major product pipelines and 11 fuel terminals, a 14,000 bpd aviation fuels business, and a network of more than 1,000 Texaco-branded wholesale sites, which is the largest branded dealer network in the UK and the second largest in Ireland.
Over half of the refinery’s production is distributed through this integrated marketing and logistics system. Valero’s purchase excludes working capital, which has an estimated value of $1 billion.
One of Europe’s largest and most complex refineries, the Pembroke facility has a total throughput capacity of 270,000 bpd, of which 220,000 bpd is crude capacity.
“The refinery has been well maintained and managed, and has an estimated cash operating cost 25% below Valero’s average, added a statement from the US group.
Similar to Valero’s other refineries, Pembroke can process a large and flexible slate of feedstocks, having used more than 60 different types of crude oil in the past decade. It has access to discounted crudes. It has a product slate of 44% gasoline, 40% distillates, 11% fuel oil and 5% other products.
The site receives feedstock cargoes by ship at its eight-berth deepwater dock, which can accommodate very large crude carriers.
“We have been looking for some time to expand and improve our portfolio of assets, but only if we could get an attractive price for assets that would add significant long-term value for our shareholders,” said Valero chairman and CEO Bill Klesse.
“After exiting refining in the US East Coast last year, this acquisition provides an opportunity for our company to supply that market more competitively, when it’s economic to do so.
“The Pembroke refinery remained profitable and cash-flow positive even during the depths of the economic downturn in 2009,” Klesse said.
Valero manufactures and markets transport fuels, petrochemicals and power. Its assets include 14 petroleum refineries with a combined throughput capacity of around 2.6 million bpd, 10 ethanol plants with a combined production capacity of 1.1 billion gallons per year, and a 50MW wind farm.
Valero is also one of the largest retail operators with approximately 5,800 retail and branded wholesale outlets in the US, Canada and the Caribbean under the Valero, Diamond Shamrock, Shamrock, Ultramar and Beacon brands.
