NuStar to Purchase Assets of AGE Refining
NuStar has received clearance from the bankruptcy court to proceed with the purchase, and the company expects to close on the acquisition on April 19, 2011.
The AGE refinery is a low-cost 14,500 barrel per day refinery based on the South Side of San Antonio, which has been operating near capacity since the March 9, 2011 completion of a seven-bay truck loading rack. The acquisition also includes a 200,000-barrel terminal in Elmendorf, Texas.
The refinery purchases and processes crude oils and condensates from across South Texas, including the developing Eagle Ford Shale. It produces and sells various products, including jet fuels, ultra-low sulfur diesel (ULSD), naphtha, reformates, liquefied petroleum gas (LPG), specialty solvents and other highly specialized fuels, to commercial and retail customers and the US military.
AGE filed for Chapter 11 bankruptcy protection on February 8, 2010, and the company has been in the midst of a court-supervised sales process.
Curt Anastasio, president and CEO of NuStar Energy and NuStar GP Holdings, said: â€œWe expect the refinery to generate attractive returns, and it is projected to be immediately accretive to our earnings and distributable cash flow. And we can lock in guaranteed margins through the futures market for crude, distillates and gasoline-related products for the next three to four years.â€
â€œThe refineryâ€™s proximity to the Eagle Ford Shale is big plus. 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 weâ€™re able to take advantage of these lower cost South Texas sweet crudes and realize transportation cost savings which will enhance the refineryâ€™s profitability.â€
Will the acquisition benefit NuStar?
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