Posted on 10/01/2015 5:25:48 AM PDT by thackney
Exxon Mobil Corp. said Wednesday it will sell its refinery in Torrance, California to PBF Energy, a New Jersey-based refining company, following an explosion at the facility in February.
PBF said it will buy the refinery, a nearby lubricants distribution center and associated terminals and pipelines for a total of $537.5 million. Exxon Mobil said in its announcement that it expected the company, which has long admitted having an eye on moving into California, to take control of the refinery by mid-2016. PBF said it will finance the deal with a combination of cash, debt and equity.
Exxon Mobil also said 1,400 workers at the plant, half employees and half contractors, are expected to be retained by PBF.
“We are excited to be adding a refinery with Torrance’s complexity, and we look forward to entering the West Coast market,” said PBF CEO Tom Nimbley in the announcement. “We are committed to the safe and environmentally responsible operations of the facility and look forward to welcoming Torrance’s well-trained and professional workforce to the PBF family.”
Exxon Mobil had previously disclosed it was planning to sell some refining assets even before the February explosion.
“The sale results from a strategic assessment of the site and how it fits with our refining portfolio,” Jerry Wascom, president of Exxon Mobil refining and supply, said in a prepared statement. “Exxon Mobil regularly adjusts its portfolio through investment, restructuring or divestment consistent with overall global and regional business strategies.”
Exxon Mobil is being cited and fined $560,000 for workplace safety and health violations following a probe into the explosion at the Los Angeles-area refinery. The blast caused a fire and shot out debris and ash that fell on lawns and homes in the surrounding community. Four contractors were hospitalized with minor injuries.
The Torrance refinery near Los Angeles was operating at no more than 20 percent capacity since the facility was damaged. The primary piece taken out of commission was the electrostatic precipitator, or ESP, which is a large emission-controlling device.
CBS News had a report Wednesday evening on the refinery explosion that contended the accident was nearly much more catastrophic. The 80,000-pound piece of equipment flew 100 feet and landed just a few feet from a tank containing a form of hydrofluoric acid — the gaseous release of which could have injured, or even killed, thousands of people living near the plant.
“It could have been much more catastrophic,” U.S. Chemical Safety Board Chairwoman Vanessa Sutherland told CBS News. “If I were in the community, I absolutely would be concerned.”
Exxon Mobil told CBS News it strongly disagreed with any claims that there was a significant risk to the hydrofluoric acid unit.
Exxon Mobil recently stopped working on a plan to restart the refinery using an old ESP with greater emissions, and now the plan is to restore the refinery to its original state, although that work is unlikely to be completed until sometime early next year.
The oil and gas giant initially was hoping to increase gasoline production as soon as late September. Exxon Mobil filed an application back in mid-August to restart the refinery with the old ESP, while equipment damaged in the blast is still being repaired.
Consideration of the refinery ramp up was scheduled for Sept. 17, but the South Coast Air Quality Management District opted to delay the matter in the wake of an acid leak at the site. The hearing delay was the third one and no new date has yet been set. As such, gasoline prices in California are expected to remain among the nation’s highest for the foreseeable future.
The Torrance refinery previously accounted for 20 percent of Southern California’s gasoline supply.
PBF has struggled of late with its own refinery accident. While not as severe as the Torrance incident, PBF’s Delaware City refinery had a fire in August that has required it to operate at a reduced capacity.
Can’t blame a company for reducing its footprint in California.
After an explosion large chunks of debris came down in Torrance...
Ok i will keep the day job but I thought it was funny
Freegards
LEX
Or another for increasing it.
HF is no joke.
That's one mighty large ESP, but I'm still having a hard time understanding why it will take so long to replace it. The ones I've seen were a large box with nozzles and wires inside. What's the big deal?
Probably easier for a northeast based company to deal with California regulators than in is for a Texas based company, but it proves the old adage that you can sell anything at the right price.
The ESP wasn’t the only item damaged. When it went, it took a lot of stuff with it.
FTA: The 80,000-pound piece of equipment flew 100 feet and landed just a few feet from a tank containing a form of hydrofluoric acid — the gaseous release of which could have injured, or even killed, thousands of people living near the plant.
My relatives live in Torrance and Rancho Palos Verdes which is down the road from there about 3 to 5 miles. I drive by the refinery when visiting. I have the windows rolled up because one night I did not and I could taste the chemicals still when I got back home 40 miles away.
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