MOSCOW (MRC) -- Calumet Specialty Products Partners LP has retained boutique energy bank Tudor, Pickering, Holt & Co to sell its small oil refinery in Great Falls, Montana, reported Reuters with reference to two people familiar with the talks.
The refinery has the capacity to process 30,000 barrels per day of crude, according to the company’s website. That puts it below the largest refineries on the U.S. Gulf Coast that can process ten times as much.
Still, its location and configuration may command a higher price than would otherwise be expected because the plant can process low-cost Canadian crudes and other types of deeply discounted oil, the people said, speaking on condition of anonymity because the talks are private.
Calumet bought the refinery from Connacher Oil and Gas in 2012 for about USD120 million, and has expanded its capacity from about 10,000 bpd at that time.
The company and the bank did not immediately comment.
The plant is the second Montana refinery currently on the block, joining Exxon Mobil Corp’s larger 61,500 bpd plant in Billings. Many US refineries are already for sale, but have struggled to find buyers.
Potential bidders for the Calumet plant could include refiners operating in the region such or smaller independents looking for growth.
Calumet sold its larger 50,000-bpd Superior, Wisconsin refinery to Husky Energy Inc in 2017 for USD435 million and last year sold its 21,000-bpd San Antonio, Texas plant for USD63 million.
Calumet’s shares have fallen from nearly USD40 in 2012 to USD2.35 on Wednesday. The company has spent the last few years stabilizing its earnings, selling under performing assets and paying down debt.
The company planned to expand its specialty products business, and to continue to rationalize lower-margin product lines, Chief Executive Tim Go said on a March 5 conference call following the company’s earnings release.
Go plans to resign effective June 1, and board member Steve Mawer has been appointed CEO.
As MRC informed before, in September 2019, ExxonMobil announced plans to spend GBP140 million over the next two years in an additional investment program at its Fife ethylene plant, which has a capacity of more than 800,000 t/y.
Ethylene and propylene are feedstocks for producing polyethylene (PE) and polypropylene (PP).
According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 215,390 tonnes in the first month of 2020, up by 23% year on year. Shipments of all grades of high density polyethylene (HDPE) and linear low density polyethylene (LLDPE) increased due to higher capacity utilisation at ZapSibNeftekhim. At the same time, PP shipments to the Russian market were 127,240 tonnes in January 2020, up by 33% year on year. ZapSibNeftekhim's homopolymer PP accounted for the main increase in shipments.
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