What PBF Gets With Exxon's Torrance Refinery

Energy

Published: October 1, 2015 8:10 am

Last Updated: April 28, 2020 9:50 am

Exxon Mobil Corp.’s (NYSE: XOM) troubled 155,000-barrel per day refinery in Torrance, Calif., is being sold to PBF Energy Inc. (NYSE: PBF) for $537.5 million, including working capital. The refinery has been closed since an explosion rocked the plant in February. Under the agreement, the refinery will be restored to full capacity before the deal closes, sometime before the middle of next year.

The Torrance refinery produces about 10% of California’s gasoline supply, and the shutdown this year has contributed to the higher prices the state’s drivers have been paying. Californians are paying an average of $2.959 for a gallon of regular gasoline Thursday morning, according to GasBuddy. That’s the highest price among all 50 states.

In addition to the refinery, PBF is also acquiring Exxon’s lubricant distribution center in Vernon, refined products terminals in Vernon and Atwood, and associated state pipelines and logistics assets, including facilities at the Southwest terminal. Exxon employs about 1,400 workers at the refinery and other facilities, half of which are company employees and half of which are contractors. In its announcement of the sale, Exxon said that “employees are expected to be offered positions with PBF.”

PBF is based in New Jersey and owns refineries in Delaware, New Jersey and Ohio. It recently acquired a Louisiana refinery from a joint venture between Exxon and Venezuela’s national oil company, PdVSA, for $322 million.

The addition of the Louisiana and California refineries to PBF’s stable of assets increases the company’s refining capacity by 60%. The company’s CEO said:

We are excited to be adding a refinery with Torrance’s complexity and we look forward to entering the West Coast market. Upon completion of these two pending transactions, we will have operations spanning four PADDs [Petroleum Administration for Defense Districts] and have diversified and increased our commercial footprint and flexibility.

Exxon shares traded up about 0.7% in Thursday’s premarket, at $74.90 in a 52-week range of $66.55 to $97.20.

PBF was inactive in the premarket, having closed up 2.2% on Wednesday at $28.23, in a 52-week range of $21.02 to $36.80.

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