Par Pacific Holdings Inc. has announced its agreed acquisition of select refining units from Island Energy Services (IES).
Through an indirect subsidiary, Par Pacific entered into an agreement with IES to acquire certain refining units for US$45 million plus additional amounts for certain hydrocarbon and non-hydrocarbon inventory, following IES's announcement that it will cease its refining operations.
The units, which are located near Par's current Kapolei refinery, will be utilised by Par Pacific to supplement its existing operations in supplying IES so that IES may fulfil its contractual obligations with Hawaiian Electric Co., Maui Electric Co., Hawaii Electric Light Co., and Kauai Island Utility Cooperative.
Par Pacific has agreed to enter into a long-term agreement with IES to utilise IES's retained logistics assets for the storage and throughput of crude oil and related products necessary for the operation of these newly acquired assets.
"We believe this transaction will prevent any disruption to the supply of fuel to meet Hawaii's electric generation needs," said William Pate, President and CEO, Par Pacific. "The closure of one of Hawaii's refineries was anticipated in 2014 by the governor's Hawaii Refinery Task Force. As the owner and operator of Hawaii's remaining refinery, we recognise our role in meeting the essential demand for petroleum products today and to ensure continuity and a smooth and practical transition to Hawaii's clean energy future."
"We believe this transition represents a best-case scenario for a 'soft landing' for all constituents in the state's transition to a renewable energy future," said Jim Yates, President, Par Hawaii Inc.
With IES's announced shift to operations of a large-scale open access import terminal, Par Pacific anticipates continued strong competition from the existing market participants, as well as from potential new entrants.
Meanwhile, IES expects to reinvest net sale proceeds in Hawaii to further expand its logistics infrastructure, which includes a network of tank farms, pipelines, and other distribution assets. IES also plans to expand its retail operations throughout Hawaii.
The transaction is expected to close before the end of 4Q18 and is subject to certain closing conditions.
Read the article online at: https://www.hydrocarbonengineering.com/refining/30082018/par-pacific-buy-select-refining-assets-ies/