Steam spews from a pipe after a fire broke out at a key gasoline-making unit at a PBF Energy Inc refinery in Delaware City, Delaware August 21, 2015.
Reuters/Charles Mostoller
HOUSTON | By Liz Hampton U.S. refiner PBF Energy took ownership on Friday of a Los Angeles-area refinery purchased from Exxon Mobil Corp for $537.5 million, clearing the way for it to focus on further North American acquisitions.
The takeover of the Torrance, California facility makes PBF the fourth largest independent U.S. refiner and expands its footprint from coast to coast, a longtime goal of founder and former chairman Tom O'Malley, who retired at the end of June.
The deal also increases PBF's total throughput capacity to around 900,000 barrels per day.
PBF had aimed to complete the purchase of the refinery in the second quarter of 2016. However, operational upsets, including a crane accident less than two weeks before the acquisition was set to close, led to fears that the deal would be delayed.
The sale was announced seven months after a February 2015 blast at the gasoline-producing fluid catalytic cracking unit (FCCU) at the plant. As a closing requirement, Exxon was required to demonstrate the refinery was fully functional for at least 15 days.
In early April, Exxon reached an agreement with state regulators to restart the crippled unit, which provides about 10 percent of the state's gasoline supply and had been offline since the explosion.
In an earlier quarterly earnings call, PBF had said it expected the unit would restart by mid-March.
PBF has also set up a trading desk in California and was active in the market in the weeks leading up to the sale, market participants said.
In June, PBF announced it would purchase the Chalmette refinery near New Orleans, Louisiana, jointly owned by Exxon Mobil Corp and Petroleos de Venezuela, marking its first facility on the U.S. Gulf Coast.
PBF also has refineries in Paulsboro, New Jersey, Delaware City, Delaware and Toledo, Ohio.
The handover of the Torrance refinery comes just after an investigation by California Attorney General Kamala Harris into possible retail gasoline market manipulation since 2014 was first reported in the news media.
(Reporting by Liz Hampton; additional reporting by Jessica Resnick-Ault in New York; Editing by Tom Brown)