Par Pacific Holdings to acquire ExxonMobil's Billings refinery

Par Pacific Holdings to acquire ExxonMobil’s Billings refinery

ExxonMobil has reached an agreement to sell its 63,000 barrel-per-day (bpd) Billings, Montana oil refinery in the United States to Par Pacific Holdings, Inc., for a base purchase price of USD310 million, plus hydrocarbon and other inventory to be valued at closing. The sales agreement includes the Silvertip pipeline, ExxonMobil’s interest in the Yellowstone pipeline and Yellowstone Energy LP, and its interests in product terminals in both states.

The transaction is expected to close in the second quarter of 2023, subject to customary closing conditions.

Par Pacific Holdings, based in Houston, Texas, U.S.A., owns and operates market-leading energy, infrastructure, and retail businesses. Par Pacific expects to fund the acquisition with cash on hand and availability under existing credit facilities, based on liquidity of approximately USD495 million on September 30, 2022. Hydrocarbon inventory is expected to be financed by a new working capital facility. The transaction is expected to be immediately accretive to Adjusted net income and free cash flow per share.

Par Pacific’s strategy is to acquire and develop businesses in logistically complex, niche markets. Par Pacific owns and operates one of the largest energy networks in Hawaii with 94,000 bpd of operating refining capacity, a logistics system supplying the major islands of the state and 90 retail locations. In the Pacific Northwest and the Rockies, Par Pacific owns and operates 61,000 bpd of combined refining capacity, related multimodal logistics systems, and 29 retail locations.  Par Pacific also owns 46% of Laramie Energy, LLC, a natural gas production company with operations and assets concentrated in Western Colorado.

The Billings refinery is the smallest ExxonMobil refinery in the United States. According to a Reuters article published in June 2022, ExxonMobil has sought buyers for the Billings refinery for at least four years. ExxonMobil has a total of 21 refineries worldwide and has invested heavily in Baytown, and Beaumont, Texas, Baton Rouge, Louisiana, all in the United States, Singapore and Rotterdam, The Netherlands.

According to Karen McKee, president of ExxonMobil Product Solutions, “ExxonMobil is focused on investing in facilities where we can manufacture higher-value products such as lubricants and chemicals.” 

“We have proudly operated the Billings refinery since 1949 and we thank our more than 300 talented employees for their dedicated service,” she said.

In 1947, Carter Oil Company began  construction on what is now the ExxonMobil Billings Refinery. The bank of the Yellowstone River east of Billings was a perfect location for one of Montana’s most complex Rocky Mountain refineries. The Billings refinery started operations in 1949 and averaged 20,000 bpd of crude oil. In 1954, the installation of the first fluid coker in the world enabled the refinery to take advantage of heavy crude. Since that time, the refinery has grown to include 18 major processing units, increasing this facility’s production to roughly 60,000 bpd of crude oil and 450 million gallons of gasoline annually. 

The Billings refinery covers 720 acres of Central Montana land, including 110 acres that have received a Wildlife Habitat certification from the International Wildlife Habitat Council.  

The refinery purchases crude oil primarily from suppliers  in Wyoming and  Alberta, Canada and produces a diverse set of  products, including:

  • All grades of gasoline 
  • Conventional gasoline blendstocks for blending with ethanol 
  • Ultra low sulfur diesel fuels 
  • Asphalt 
  • Butane 
  • Propane 

The refined products from the Billings refinery are distributed throughout the U.S. Rocky Mountain region, including Montana, Wyoming,  Utah, Colorado, South Dakota, Washington and Idaho. Some products are occasionally distributed to Canada.