NuStar Energy has purchased refining and terminal assets from AGE Refining under the Chapter 11 Bankruptcy trustee for $41 million (€28.6 million).
The acquisition is expected to be finalised tomorrow and will include the purchase of a 14,500 barrel/day refinery based on the South Side of San Antonio, US and a 200,000-barrel terminal in Elmendorf, Texas, US.
‘This relatively small transaction is a great acquisition for our investors, employees and community,’ says Curt Anastasio, President and CEO of NuStar Energy and NuStar GP Holdings. ‘We can lock in guaranteed margins through the futures market for crude, distillates and gasoline-related products for the next three to four years, so we expect the refinery to generate attractive returns, and it is projected to be immediately accretive to our earnings and distributable cash flow.’
The refinery purchases and processes crude oils and condensates from across South Texas, including from the Eagle Ford Shale area.
It produces and sells various products, including jet fuels, ultra-low sulphur diesel, naphtha, reformates, liquefied petroleum gas, specialty solvents and other fuels, to commercial and retail customers and the US military.
‘The refinery’s proximity to the Eagle Ford Shale is big plus,’ Anastasio adds. ‘The light crude oil that is coming out of the Eagle Ford Shale is well-suited to the refinery and it is in our backyard so our transportation costs are low. We expect this will provide a significant economic benefit because we’re able to take advantage of these lower cost South Texas sweet crudes and realise transportation cost savings which will enhance the refinery’s profitability.’