Exxon sells Montana oil refinery to Par Pacific for $310 million

HOUSTON, Oct. 20 (Reuters) – Exxon Mobil Corp (XOM.N) Thursday agreed to sell its Billings, Montana, refinery and related pipeline properties to Par Pacific Holdings Inc. (PARR.N) for $310 million.

The sale caps a years-long effort by the U.S. oil giant to further shrink its refining footprint and focus production at plants along the U.S. Gulf Coast and in the Midwest. He also sold oil-producing properties to boost returns.

“ExxonMobil is focused on investing in facilities where we can manufacture higher value products such as lubricants and chemicals,” said Karen McKee, head of the oil company’s product solutions unit.

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The deal for the 63,000 barrel per day refinery is expected to close in the second quarter of 2023, Exxon said in a statement.

Par Pacific was one of several independent refiners monitoring the plant and investing some of this year’s record refining profits to expand its assets, according to people familiar with the matter.

Profit margins for processing crude into gasoline, diesel and jet fuel hit five-year highs in the United States earlier this year, which helped drive sales. Increased travel and fewer refineries due to pandemic shutdowns pushed the average U.S. retail gasoline price to $3.84 a gallon this week from $3.36 a year ago. year.

The sale includes the Silvertip Pipeline, Exxon’s interest in the Yellowstone Pipeline and Yellowstone Energy LP and its product terminal interests in Montana and Washington.

“This acquisition expands our fully integrated downstream network into the western United States,” said William Pate, President and CEO of Par Pacific.

Since 2013, Houston-based Par Pacific has purchased refineries in Hawaii, Wyoming and Tacoma, Washington.

Shares of Par Pacific jumped 8.7% to $21.62 on Thursday, their highest level in two and a half years.

“The acquisition benefits Par’s credit profile as it increases scale and diversification and will be funded from existing cash,” ratings service Moody’s said.

Par said he would pay for the purchase of Billings with cash on hand and existing lines of credit.

As part of the agreement, Par Pacific will continue to supply fuel to Exxon and Mobil stations in the area.

For the 300 workers at the Billings refinery, including 150 workers represented by the United Steelworkers (USW) union, news of the sale agreement put to rest worries about a possible plant closure.

U.S. refining capacity has fallen by 1 million bpd since 2019, mostly due to plant shutdowns amid falling demand following lockdowns during the COVID-19 pandemic.

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Reporting by Erwin Seba in Houston, additional reporting by Arunima Kumar in Bengaluru; Editing by Paul Simao

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