Tesoro to acquire two BP refineries and associated operations

Petroleum News Alaska

Tesoro Petroleum Corp. said July 17 that it has reached agreement to acquire BP p.l.c.’s Mandan, N.D., and Salt Lake City, Utah, refineries and associated storage, pipeline, distribution and gasoline marketing operations for $677 million, excluding working capital.

Upon completion of the deal, BP will transfer ownership of the two refineries, associated North Dakota crude and product pipelines, bulk storage, eight product distribution terminals, and 45 retail gasoline stations to Tesoro. BP will also assign to Tesoro contracts for about 300 Amoco-branded stations that are owned by about 80 Amoco-branded gasoline jobbers.

Subsequent to the transaction, Tesoro will own and operate five refineries with a combined throughput capacity of 390,000 barrels per day. In addition, Tesoro’s branded retail network locations will expand to approximately 640 retail locations while adding approximately 700 employees to Tesoro.

Tesoro and BP will quickly seek required regulatory approvals and hope to close the acquisition in the early part of the fourth quarter.

BP’s Salt Lake City refinery has a crude oil capacity of 55,000 barrels per day and is the largest of four refineries in Utah. More than half of its production is gasoline, with principle other products of diesel and jet fuel. The Mandan refinery, which is located near Bismarck, N.D., has a rated capacity of 60,000 barrels per day and produces mostly gasoline, with the balance in distillates, jet fuel and other products.