Valero to buy Murphy Oil’s refinery in Louisiana

One month after purchasing a refinery in Great Britain, Valero Energy Corp., a major U.S. independent refiner, is planning to buy Murphy Oil USA Inc.’s plant in Meraux, Louisiana. Valero, which is based in San Antonio, Texas, said the plant would cost US$325 million. In addition, the company will pay an estimated US$300 million for related assets and crude oil inventories. The transaction is subject to regulatory approvals and is expected to be finished within the fourth quarter. The refinery in Meraux has a total throughput capacity of 135,000 barrels per day (bpd). As part of the purchase, Valero will gain a dock on the Mississippi River, as well as pipeline capability to Collin, Mississippi.
Valero Energy Corp.’s Expansion Program
The company plans to integrate the Meraux plant with its St. Charles refinery in Norco, Louisiana, which has a capacity of 205,000 barrels a day. The St. Charles refinery is 40 miles away on the Mississippi River. CEO Bill Klesse said, “Our plan is to integrate feed stocks and refined product blending with the St. Charles refinery, especially as our new 60,000 barrel-per-day hydrocracker is completed at St. Charles.” David Wood, CEO of Arkansas-based Murphy Oil, said that the plan to sell the Meraux plant is part of the company’s plan to leave the refining business. Valero on the other hand, says it is buying an adjacent product terminal and a 20% equity interest in a pipeline and terminal, as well as a 3.2% interest in the Louisiana Offshore Oil Port, the only deep-water port for oil tankers in the United States. (September 2, 2011)