PBF closes on Torrance refinery purchase

OREANDA-NEWS. July 04, 2016. PBF Energy has completed its \\$537.5mn purchase of the 155,000 b/d refinery in Torrance, California, and associated assets from ExxonMobil.

PBF said the purchase brings its total US throughput capacity to 900,000 b/d, making it the fourth-largest North American independent refiner.

"We are excited to increase our geographic diversity with a complex refinery like Torrance in the dynamic west coast fuels market," PBF chief executive Tom Nimbley said.

PBF's Torrance takeover marks the company's second major acquisition in less than a year, increasing the US independent refiner's capacity by two-thirds and spreading its reach to all US coasts.

The change in ownership also marks the latest milestone for a refinery that has struggled to restore normal operations following a February 2015 explosion on equipment that produces up to 20pc of southern California's gasoline demand.

The blast crippled equipment associated with a fluid catalytic cracking (FCC) unit for more than a year. Workers told California investigators that the FCC had not functioned properly for almost a decade, an allegation ExxonMobil declined to address at the time. The refiner explored and then abandoned a limited restart of the equipment last fall. Restart work began in earnest in May, following local regulatory approval.

PBF earlier this year estimated it would take 35 days of work to reach the 15 days of stable operations required to complete the purchase, but repair struggles stretched the startup well beyond such a timeline. A 20 June crane collapse at the refinery stoked further concern that the companies could not complete the planned mid-2016 handover.

Regulators and competitors both will watch for stable operations at the facility under PBF's control.

"Everybody understands that Torrance has not run as well as it should have or could have in the last several years," Nimbley said in April. "That is primary, priority one for us, is to make sure we do not have those problems and put all of our resources there."

PBF has managed older and idled refineries since its inception, which included a rocky restart at its 190,000 b/d refinery in Delaware City, Delaware.

But California poses challenges steeper than stable operations. State proposals have made for a tough operating environment for refiners. Those plans include a rising share for renewable diesel in the state transportation pool and regulations that consider the carbon intensity of the crudes refiners choose to run.

Rail facilities needed to tap cheaper North American crudes have languished in permitting, while both Californian and Alaskan North Slope crude production continues a steady decline.