Marathon Petroleum Corp. inked a pact to purchase BP’s beleaguered Texas City refinery, three intrastate natural gas pipelines and other assets in a deal worth up to $2.5 billion.
Marathon also said it will acquire an allocation of BP’s Colonial Pipeline Co. shipper history, four terminals, retail marketing contract assignments for approximately 1,200 branded sites, and a 1,040 megawatt cogeneration facility.
The refinery has capacity of 451,000 barrels per calendar day and 475,000 barrels per stream day.
The base purchase price is $598 million, plus inventories estimated at $1.2 billion, Marathon Petroleum said.
The agreement also contains an earnout provision under which MPC could pay up to an additional $700 million over six years, subject to certain conditions.
The transaction, which Marathon expects to boost earnings in the first year of operation, will close early next year, officials said.
The Texas City refinery suffered a deadly explosion in March 2005. The incident took the lives of 15 workers and injured as many as 170, raising a safety alarm across BP’s U.S. operations. Following this, the company shut down the refinery for about two years and incurred $1 billion in compensations to restore the unit.