Chevron Corp. (NYSE: CVX) Nsaid Jan. 30 it would pay $350 million to buy a refinery in Pasadena, Texas, from Brazilian state oil company Petrobras.
In addition to the 110,000-barrel-per-day (bbl/d) refinery, Chevron will take ownership of a 466-acre (188.5 hectares) complex on the Houston Ship Channel that includes storage tanks with capacity for 5.1 million barrels of crude oil and refined products, as well as 143 acres of additional land, the company said.
"This expansion of our Gulf Coast refining system enables Chevron to process more domestic light crude, supply a portion of our retail market in Texas and Louisiana with Chevron-produced products, and realize synergies through coordination with our refinery in Pascagoula," said Pierre Breber, executive vice president of Chevron downstream and chemicals.
Chevron, which reported a 150,000-bbl/d increase in shale production in the third quarter, has said it wants a second Gulf Coast facility to handle that crude and better supply its retail gasoline network. The Pasadena refinery produces mostly gasoline and distillates such as diesel.
The deal includes all of Petrobras subsidiary Pasadena Refining System Inc, which operates the refinery and tank farm and owns the adjoining property, and PRSI Trading LLC.
Once approved by regulators, the acquisition will become the second Gulf Coast refinery operated by Chevron and the company’s only one in Texas.
Refiners insist they will continue to import from the U.S. assuming the price is competitive.
OPEC and other producers including Russia have gradually tightened supply through 2019 to reduce a global glut. OPEC and its partners may not renew the curbs when they expire after June because of the risk of over-tightening the market.
‘There is no electricity, everything is paralyzed,’ says union leader.