© 2012 The Texas Lawbook.
By Natalie Posgate
Staff Writer for The Texas Lawbook
Marathon Petroleum Corporation announced Monday its plan to purchase BP’s Texas City refinery and other assets in Texas and the Southeast for $598 million plus an estimated $1.2 billion in inventories.
Ohio-based MPC’s legal team comprises of lawyers from Jones Day’s Houston, Dallas and other offices around the world. Leading the team is Houston energy partner Jeff Schlegel.
By obtaining the BP Texas City refinery, MPC will have ownership of one of the largest and most complex refineries in the U.S, which produces 451,000 barrels per calendar day. The refinery has the flexibility to process a wide range of crude oils, and has access to price-advantaged mid-continent and Canadian crudes via pipelines as well as waterborne cargoes.
“This world-scale refinery and related assets complement our current geographic footprint and align well with our strategic initiative of growing in existing and contiguous markets to enhance our portfolio,” MPC President and Chief Executive Officer Gary R. Heminger said in a statement.
In addition to the Texas City refinery, MPC will also gain three intrastate NGL pipelines originating at the refinery, an allocation of BP’s Colonial Pipeline Company shipper history, four terminals, retail marketing contract assignments for approximately 1,200 branded sites and a 1,040 megawatt cogeneration facility.
According to Reuters, MPC will not incur any of BP’s liability from the 2005 explosion at the Texas City refinery that killed 15 and injured 180.
The transaction is expected to close early next year and funded with cash on hand.
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