Delek US Holdings is selling four asphalt terminals to Andeavor for $75m. The transaction includes asphalt terminal assets in Bakersfield, Mojave and Elk Grove, California and Phoenix, Arizona, as well as Delek’s 50% interest in the Paramount-Nevada Asphalt Company, LLC joint venture that operates an asphalt terminal located in Fernley, Nevada.
Chairman, President and Chief Executive Officer of Delek, Uzi Yemin said: “We explored different options for these assets, including a sale to our affiliate, Delek Logistics Partners, LP, and determined this transaction was the most attractive relative to other options. The net cash proceeds from this transaction could be used in our capital allocation program to return cash to shareholders.
“We have additional logistics assets with potential EBITDA of approximately $73.0 million that may be dropped down to Delek Logistics Partners in the future, including the logistics assets at the Big Spring, Texas refinery with approximately $41.0 million of EBITDA.
“With the completion of the acquisition of Alon USA Partners on February 7, 2018, we expect to move forward with the drop down of the Big Spring assets during the first half of 2018, subject to the completion of the customary conditions related to the drop down process.”
Andeavor’s Executive Vice President of Commercial and Value Chain, Keith Casey said: “We are excited to leverage our experience to grow our asphalt offering in the West Coast and Southwest regions, and we look forward to providing exceptional asphalt products and services to our new customers in California, Nevada and Arizona. We expect this investment to drive higher integrated margins across the value chain, offset impacts created by bunker fuel specification changes and improve the value of heavy resid produced at our refineries.”
13th Feb 2018