Marathon Petroleum has closed its transaction with BP to purchase several assets, including the 451,000 bpd refinery located in Texas City, Texas, the companies said on Friday.
The refinery will be renamed and referred to in future Marathon communications as the Galveston Bay refinery, according to a news release.
The deal also includes a 1,040 megawatt cogeneration facility, four light product terminals located in the Southeast, retail marketing contract assignments for approximately 1,200 branded sites representing approximately 61,000 bpd of gasoline sales, three operating intrastate natural gas liquids pipelines originating at the refinery and a 50,000 bpd allocation of BP's Colonial Pipeline shipper history.
The transaction was first announced on October 8, 2012. The base purchase price is approximately $598 million, plus inventories valued at approximately $1.1 billion.
The agreement also contains an earnout provision under which Marathon could pay up to an additional $700 million over six years, subject to certain conditions. The transaction is expected to be accretive to earnings in the first year of operation, the company said.
"This is a unique opportunity to acquire, at an attractive price, a world-scale refinery on the western Gulf Coast that is well positioned to benefit from the growing supply of North American crude oil," said Marathon Petroleum CEO Gary R. Heminger.
"The refinery and related assets should enhance our current footprint by integrating well with our existing operations. This transaction will provide MPC the opportunity to grow in contiguous markets, expand our export opportunities and further optimize our Gulf Coast operations.
"As our history has shown, our focus will remain on the safe and environmentally responsible operations of all of our facilities," he added. "We look forward to providing quality products and services to meet the needs of our new branded jobbers.
"We welcome all of our new employees at the Galveston Bay refinery and product terminals."