MOSCOW (MRC) -- US refiner Hollyfrontier and its pipeline partner will buy almost all of Sinclair Oil's assets in two deals totaling around USD2.6 billion, the companies said, adding new refining, pipeline and storage assets to their portfolio, reported Reuters.
The deals come as US fuel demand continues to recover from last year's coronavirus-led record lows, with states starting to reopen and road travel trending toward pre-pandemic levels.
A new company, HF Sinclair Corp, will replace HollyFrontier as the public company trading on the New York Stock Exchange, it said in a statement.
HollyFrontier said that at the closing of the deal, expected in mid-2022, HollyFrontier shares will convert into shares of HF Sinclair on a one-for-one basis. HF Sinclair will then issue about 60.2 million shares to stockholders of The Sinclair Companies, Sinclair Oil's parent, giving them 26.75% of proforma ownership in the new company.
Sinclair earlier this year became embroiled in a controversy surrounding three last-minute biofuel waivers granted to it by the US Environmental Protection Agency (EPA) under the Trump administration.
The waivers were vacated by a US appeals court in May after a motion filed by the EPA in April, under the Joe Biden administration.
As part of the deal, HollyFrontier will buy Sinclair's branded marketing unit, renewable diesel unit and two Rocky Mountain-based refineries.
Holly Energy Partners (HEP.N), HollyFrontier's transportation business, will buy Sinclair's 1,200 miles of pipeline assets and storage terminals with around 4.5 million barrels of capacity.
The Holly Energy Partners deal is expected to be worth around USD758 million in cash and stock. Stockholders of The Sinclair Companies will own about 16.6% of Holly Energy after the deal closes.
The HollyFrontier deals will not include exploration and production assets owned by Sinclair Oil & Gas, the companies said.
As MRC reported earlier, HollyFrontier Corp said in May, 2021, it would purchase a 149,000-bpd refinery in Washington from Shell as part of the European company"s strategy to reduce its global refinery footprint. HollyFrontier will buy the Puget Sound refinery near Anacortes for USD350 million in cash, plus hydrocarbon inventory to be valued at closing with an estimated current value of USD150 MM-USD180 MM, the companies said. The transaction is expected to close in the fourth quarter of 2021, subject to regulatory clearance.
Ethylene and propylene are the main feedstocks for the production of polyethylene (PE) and polypropylene (PP), respectively.
According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 953,400 tonnes in the first five months of 2021, which virtually corresponded to the same figure a year earlier. High denisty polyethylene (HDPE) shipments decreased. At the same time, PP shipments to the Russian market were 607,8900 tonnes in January-May 2021, up by 33% year on year. Shipments of homopolymer PP and PP block copolymers increased, whereas deliveries of PP random copolymers decreased.