Alon to buy Valero's Krotz Springs refinery

摘要

Alon USA has reached a definitive agreement to buy Valero's 83,100-b/d Krotz Springs, La., refinery for $333 million in cash. The deal will include a five-year off-take agreement, along with a one-year service contract. Alon and Valero have negotiated an "earn-out" clause where Valero would be eligible to receive payments for three years if it exceeds certain margin thresholds. Alon had been in advanced talks with Valero to buy the plant, as exclusively reported (OE 05/05/08), despite trouble getting its Big Spring, Tex., refinery up to speed after an explosion earlier this year. The deal should close by early third quarter, pending regulatory approvals. Observers do not believe there will be any huge hurdles, since Alon's operations do not overlap with the Krotz Springs output or distribution. The refinery supplies light products for the Colonial Pipeline and Mississippi River markets. David Wiessman, Alon executive board chairman, said the refinery was being acquired at "an attractive price" and it should increase Alon's refining capacity by 50%.