New owner takes control of Toledo’s Sunoco refineryWritten by Duane Ramsey | | firstname.lastname@example.org
PBF Energy Company officially took control of the former Sunoco refinery in Toledo March 1 after its purchase of the facility became final. It will operate it as Toledo Refining Company LLC.
PBF paid $200 million in cash and $200 million in a note provided by the seller. The terms also include a participation payment of up to $125 million based on the Toledo refinery’s profitability.
PBF announced its purchase of the refinery Dec. 2, 2010. It is the first refinery purchase for PBF, which has also agreed to buy two other facilities in Delaware and New Jersey from Valero Energy Corp.
It is the second refinery sale for Sunoco in the past two years. The company sold its refinery in Tulsa, Okla., to Holly Corp. in June 2009 and plans to close its Eagle Point Refinery in New Jersey this year.
“Sunoco made Toledo into a modern refining facility but appears to be leaving the refining business,” said Thomas O’Malley, chairman of PBF Energy. “PBF only has one business. It was founded as a refining company and that’s our business.
“We know the refinery will do a good job here.”
The Toledo facility, located in Oregon, is a high-conversion light/sweet refinery with a capacity of producing 170,000 barrels per day.
There are approximately 5 million barrels of crude oil and product storage capacity at the refinery.
“The Toledo refinery is well positioned to serve the local marketplace. We welcome our 433 new employees to PBF,” said Thomas Nimbley, CEO of PBF.
O’Malley and Nimbley emphasized the importance of being safe, reliable and environmentally aware. They also said that PBF gives employees the authority to do their job and take appropriate action to ensure that safe operation.
PBF plans to retain the same workforce at the refinery since Toledo has talented and experienced employees, according to Nimbley.
“PBF is very comfortable having the union represent the workers here. We’ve dealt with unions all of our careers,” O’Malley said.
David Hoffman, the new plant manager for Toledo Refining Company, recognized the local Steelworkers union committee for re-negotiating a deal that made the acquisition possible.
“We celebrate Day 1 of what I believe will be a bright future in Toledo,” Hoffman said.
Lucas County Commissioner Pete Gerken and Toledo Mayor Mike Bell recognized the “great work force” at the refinery. Bell even invited PBF to move its headquarters here.
Oregon Mayor Michael Seferian said the city of Oregon is home to both local refineries operated by BP, as well as PBF.
PBF was formed in 2008 to acquire U.S. refineries and is based in Parsippany, N.J. The Blackstone Group and First Reserve Corporation are the principal investors in PBF and continue to support its growth and development.
The Toledo refinery is the second oldest operating refinery in the U.S., second only to the refinery in Lima operated by Premcor. Many members of the PBF management team previously worked for Premcor and are familiar with the refinery there.
Sunoco had owned and operated the Toledo refinery since 1894, according to a company spokesperson. Its predecessor company purchased a stake in the refinery in 1894 and became sole owner in 1895 when it began production of kerosene, fuel oil and gasoline.
“We are grateful to the talented and dedicated employees who made the Toledo refinery an important part of the company for many years,” Sunoco Chairman and CEO Lynn Elsenhans stated in a press release.
Sunoco’s existing retail marketing and logistics operations in Ohio and nearby states are not impacted by the sale. The company will continue to supply refined products to its branded distributors through a long-term agreement with PBF.
Sunoco operates more than 4,800 branded retail locations in 23 states, including numerous locations in Northwest Ohio.