Valero Sells Krotz Springs, La., Refinery To Alon

Alon USA Energy Inc. said it completed the acquisition of the Krotz Springs refinery from Valero Energy Corporation, paying out $333 million in cash plus approximately $140 million for working capital, including inventories.

“This latest acquisition is another step in our business plan to methodically grow our operations and expand our refining capacity,” said David Wiessman, Alon’s executive chairman. “We anticipate that this transaction should generate strong free cash flow, which should enable us to repay its associated debt in as early as three years.”

Alon President and CEO Jeff Morris said acquisition of the Krotz Springs refinery will increase the company’s current crude refining capacity by 50%, to approximately 250,000 barrels per day. That amount includes capabilities from four refineries located on the West Coast, West Texas and Gulf Coast.

“We would like to welcome the management team and employees of the Krotz Springs refinery to the Alon family,” Morris said. “This refinery ranks among the most reliable U.S. refineries, which is a testament to their experience and dedication. We look forward to working together to implement our plans for further improving the refinery’s operations, including projects to upgrade the refinery to produce low sulfur diesel and to process a Mars-type crude slate.”

The Krotz Springs refinery services multiple demand centers in the Southeast and East Coast markets through the low-cost Colonial pipeline.

Alon USA Energy Inc., headquartered in Dallas, Texas, is an independent refiner and marketer of petroleum products, operating primarily in the South Central, Southwestern and Western regions of the U.S. The company owns four crude oil refineries in Texas, California, Louisiana and Oregon, with an aggregate crude oil throughput capacity of approximately 250,000 barrels per day.

Valero, based in San Antonio, Texas, had announced earlier this year that it would explore strategic alternatives for the Krotz Springs refinery. One of the nation’s largest retail operators, Valero has approximately 5,800 retail and branded wholesale outlets in the U.S., Canada and the Caribbean under various names, including Valero, Diamond Shamrock, Shamrock, Ultramar and Beacon.

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