Yorktown Refinery, Terminal Sale Plans Announced

By WYDaily Staff Thursday, December 01, 2011

The parent company of the Yorktown Refinery announced today the planned sale of the refinery terminal and idled refinery.

Western Refining, Inc. today announced that it has entered into agreements with Plains Marketing, L.P. and Plains Pipeline, L.P., both subsidiaries of Plains All American Pipeline, L.P., for the divestiture of its Yorktown facilities and an underutilized segment of its crude oil pipeline in southeast New Mexico for $220 million.

The companies executed asset purchase agreements under which Western will sell substantially all of its Yorktown assets, including both the terminal and idled refinery, in addition to an 82-mile segment of a 424-mile crude oil pipeline in New Mexico to Plains. Western will retain its East Coast wholesale business and continue to market products in the Mid-Atlantic region.

In a statement about the sale, Western's President and CEO Jeff Stevens said it allowed the company to "monetize the Yorktown assets and exit the volatile East Coast refining market."

Stevens continued, "Continued extreme volatility of refining economics on the East Coast has significantly reduced the probability of restarting refining operations at Yorktown. This transaction precludes such a restart but allows us to maximize the value of the terminal assets."

The sale of the Yorktown assets and the New Mexico pipeline segment are contingent upon concurrent closings, both of which are subject to regulatory approvals and other customary conditions. The transactions are expected to close before the end of the year. Western expects to record a non-cash loss on disposition of these assets of $440 to $460 million in the fourth quarter.

Western Refining announced it would suspend refining operations at the Yorktown Refinery in August 2010. In a statement then to the press, Stevens cited the ongoing poor economy as the reason to shut down. The refinery employed about 250 people, plus an additional 100 contractors. Production stopped in mid-September 2010, although the Western has continued to operate the Yorktown products terminal.