FINDLAY, Ohio —
Marathon Petroleum Corp. is purchasing a huge Texas refinery from BP PLC as part of a megadeal estimated at $1.8 billion.
The sale will allow Marathon Petroleum to pass BP and become the fourth-largest refiner in the United States.
The Findlay-based company will pay $598 million for BP’s Texas City refinery and nearby pipelines and fuel terminals. It will pay an additional $1.2 billion for the plant’s inventory of oil and petroleum products.
The details of the sale were announced Monday.
Texas City is on Galveston Bay, about 40 miles southeast of Houston. The refinery, which processes more than 450,000 barrels of oil a day, is one of the largest and most complex in the world. It is the fifth-largest in the United States.
The sale includes more than 100 miles of liquefied-natural-gas pipelines, four light-product terminals and supply contracts with about 1,200 BP service stations.
The sale is being financed with cash on hand. It is expected to be closed by the end of the year.
The refinery was the site of an explosion in March 2005 that killed 15 workers and injured more than 170. In the aftermath, BP was found to have violated environmental laws.
The company has paid more than $2 billion to settle lawsuits and fines stemming from the explosion. It also has spent more than $1 billion on safety and infrastructure improvements plus $500 million to make fixes under a 2010 agreement with the Occupational Safety and Health Administration.
BP will be responsible for the fines, penalties and other infractions tied to its ownership. The same applies to pending litigation and claims brought against the refinery.
Based on past sales of other large refineries, BP was expected to get more for the facility.
Marathon Petroleum said it expects the refinery to immediately boost its profits, reaping $700 million to $1.2 billion before interest, taxes, depreciation and amortization. Marathon already owns an 81,500 barrel-a-day refinery in Texas City.
With the addition of the second Texas City plant, Marathon Petroleum would have a total of 1.64 million barrels per day of U.S. refining capacity, roughly 9.5 percent of the national total, concentrated in the Midwest and Gulf Coast.
Marathan Petroleum officials said the deal would increase the company’s ability to export refined products, a growing business for U.S. refiners that have the capacity to ship refined products abroad as domestic demand slows because of changing consumer habits and the struggling economy.
Last year the United States became a net exporter of refined products for the first time in 62 years, shipping 439,000 barrels per day more fuel than it imported as domestic demand waned and refiners looked to foreign markets to bolster profits, according to U.S. government data.
BP has been trying to sell refining and other assets to help cover costs associated with the 2010 Deepwater Horizon explosion and oil spill in the Gulf of Mexico. Since 2010, BP has agreed to sell $35 billion worth of assets, and the company expects that to rise to $38 billion by next year.
The Texas City refinery’s size, complexity and difficult past made it tough for BP to find buyers.
The move will let Marathon Petroleum increase its refinery capacity by nearly 40 percent at a low price. The refinery has been costly to operate for BP.
Marathon Petroleum was created in July 2011 after being spun off by Marathon Oil Co. of Houston, which now focuses on oil and gas exploration and drilling.
MARK MAYNARD can be reached at mmaynard@dailyindependent.com or (606) 326-2648.
Local News
Marathon’s Texas-sized deal
$1.8 billion sale makes company fourth-largest refiner in U.S.
- Local News
-
- Secretary of Education coming to Louisville
-
New laws go into effect next week
New laws approved during the Kentucky General Assembly’s 2013 regular session go into effect on Tuesday.
-
Local in brief: 6/19/13
Southland Bible Institute’s training for high school students continues through Friday at the school at 238 W. Southland Drive.
-
Saturday's Flatwoods Music Festival will include tributes to Mike Murphy
The songs of Mike Murphy and Zachariah will be remembered and performed Saturday amid an afternoon and evening of free music at the annual Flatwoods Music Festival.
-
Local WinShape camp gaining steam
The WinShape Camps for Communities at Bridges Christian Church the first week of July are starting to draw considerable buzz.
-
Camp Invention full of science-based discovery
The formula for inventing a new machine, according to 9-year-old Hayden Wheeler, goes something like this: “First, I run it through my mind and plan it out, and then I make adjustments in my mind, and then I try it out.”
-
Boyd staying with same health plan
Boyd County officials heard pitches Tuesday for two new health care plans — one for employees, the other for inmates. Both claimed they could save taxpayers thousands of dollars in medical expenses over the coming year.
-
Sentencing in Carter drug trafficking case
Five people were sentenced to prison terms last week in a federal drug-trafficking case that involved selling cocaine and pills in Carter County, according to court documents.
-
19-year-old launching one-man food drive, ‘Cans for a Cause’
Never accuse Aaron Hannah of not being ambitious and failing to set high goals for himself.
Later this month, Hannah, a 19-year-old 2012 graduate of Raceland-Worthington High School, will launch what is essentially a one-man food drive. His goal: to collect at least 10,000 pounds of canned food for River Cities Harvest to distribute to local nonprofits and churches that help feed the hungry.
Hannah, who just completed his freshman year as a Bonner Scholar at Berea College, said scholars are encouraged, but not required, to do community projects designed to help the needy. -
Westwood man charged with attempted murder
A Westwood man was arrested on attempted murder charges following an incident Sunday night, according to the Ashland Police Department.
Michael L. Thompson, 38, was charged following an investigation. - More Local News Headlines
Raw: Massive Protests Fill Brazilian Streets
Raw: German President Welcomes President Obama
Fans Cheer Dramatic Heat Comeback
Raw: Arizona Wildfire Scorches 8 Square Miles
Hoffa Mystery Still Fascinates After 4 Decades
Raw: 1 Dead in Shooting at Mo. Apartment Complex
Raw: Huge Fire Near Yosemite National Park
Raw: Obama Arrives in Berlin
3 Charged in Ohio With Enslaving Mom, Daughter
Obama Seeks G-8 Support on Syria
Raw: Volcano Erupts Near Mexico City
Kid Couture: Spending Big Bucks on Babies
Suicide Bombs Target Baghdad Mosque, Killing 29
Military Plans to Put Women in Combat Jobs
Solar Power Chargers in NYC Parks
Civil Rights Groups Sue NYPD Over Muslim Spying
Raw: First Lady, Daughters Enjoy Irish Sights
RAW: NSA Director Says 50 Plots Foiled
Boeing, Airbus Battle for Sales Supremacy
