Calumet Specialty Products Partners, L.P. has announced the sale of its 50% equity interest in Dakota Prairie Refining, LLC (DPR) to joint venture partner WBI Energy, Inc., a wholly-owned subsidiary of MDU Resources Group, Inc. Concurrent with Calumet's sale of its equity interest to WBI, Tesoro Corporation has acquired 100% of DPR from WBI in a separate transaction that closed on 27 June 2016.
DPR is a 20 000 bpd fuels refinery with related storage and logistics assets located in Dickinson, North Dakota. DPR commenced operations in May 2015, employs approximately 75 people and produces a combination of diesel fuel, naphtha and atmospheric tower bottoms.
Under the terms of the definitive agreement with WBI, Calumet will receive consideration of US$28.5 million and will be released from all financial, commercial and environmental obligations associated with DPR, including certain debt obligations of DPR that currently total approximately US$66 million.
"This transaction allows for the orderly divestiture of DPR from Calumet's portfolio, while positioning us to refocus on our vision of becoming the premier provider of petroleum-based specialty products in the world," stated Tim Go, CEO of Calumet. "Further, we view this agreement as an optimal outcome for all parties involved, including the valued employees of DPR, surrounding communities and customers whom the refinery continues to supply."
"Although operations at DPR have been safe and reliable since the refinery commenced production in 2015 – a testament to the dedication and diligence of our on-site employees – market conditions have been challenging, given sustained commodity price volatility and a slowing in commercial activity throughout the Bakken region," continued Go. "For the full year 2016, we anticipate the sale of our joint venture interest in DPR will positively impact our consolidated adjusted EBITDA, while bolstering our overall liquidity."
"The sale of DPR represents the first significant divestiture in Calumet's 25 year history," continued Go. "This transaction positions us to narrow the partnership's strategic focus around our remaining portfolio of competitively advantaged, niche market assets. Though a series of operations excellence initiatives, we will seek to extract additional value from this portfolio, while positioning the partnership to drive sustained growth in cash flows from operations in the coming years."
Adapted from press release by Rosalie Starling
Read the article online at: https://www.hydrocarbonengineering.com/refining/29062016/calumet-comments-on-dakota-prairie-refining-sale-3606/