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HollyFrontier agrees to purchase Puget Sound Refinery, co-generation facility, other assets for $350 milliongenbuy
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HollyFrontier agrees to purchase Puget Sound Refinery, co-generation facility, other assets for $350 milliongenbuy

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Tulsa Skyline (copy) (copy) (copy)

A view of the Tulsa skyline shows the HollyFrontier refinery in the foreground.

HollyFrontier announced Tuesday an agreement to buy the Puget Sound Refinery, the on-site co-generation facility and related logistics assets, from Equilon Enterprises, LLC, doing business as Shell Oil Products U.S., for $350 million.

Dallas-based HollyFrontier, which operates a refinery in Tulsa, also agreed to purchase from Shell hydrocarbon inventory that has a current estimated value at between $150 million to $180 million.

The buyer expects to fund the acquisition with a one-year suspension of its regular quarterly dividend and cash on hand and expects the transaction to be immediately accretive to HollyFrontier’s earnings per share and free cash flow.

HollyFrontier expects the transaction to close in the fourth quarter 2021. Its board approved the one-year suspension of the regular quarterly dividend effective with the dividend to be declared for the first quarter of 2021 and is expected to resume the dividend after such time.

“We are excited to announce the acquisition of the Puget Sound Refinery, an asset with a strong record of financial and operational performance,” Mike Jennings, president and CEO of HollyFrontier, said in a statement. “We believe that the Puget Sound Refinery will complement our existing refining business, with sales into premium product markets and advantaged access to Canadian crude. We are committed to the continued safe and environmentally responsible operations of the facility and welcome Puget Sound’s highly skilled workforce to the HollyFrontier family.”

The Puget Sound Refinery is located on about 850 acres in Anacortes, Washington, roughly 80 miles north of Seattle and 90 miles south of Vancouver, British Columbia.

The 149,000-barrel-per-day facility is “a large, high quality and complex refinery with catalytic cracking and delayed coking units and is well positioned geographically and logistically to source advantaged Canadian and Alaskan North Slope crudes,” the company said.

In addition to refining assets and an on-site cogeneration facility, the transaction includes a deep-water marine dock, a light product loading rack, a rail terminal, and storage tanks with about 5.8 million barrels of crude, product and other hydrocarbon storage capacity.

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