Through an indirect subsidiary, Par Pacific Holdings, Inc. has entered into an agreement with Island Energy Services (IES) to acquire certain refining units for $45m for certain hydrocarbon and non-hydrocarbon inventory following IES’ announcement to cease its refining operations.
The units, which are located near Par’s current Kapolei refinery, will be utilised by Par Pacific to supplement its existing operations in supplying IES so that IES may fulfil its existing contractual obligations with Hawaiian Electric Company, Maui Electric Company, Hawaii Electric Light Company, and Kauai Island Utility Cooperative. Par Pacific has agreed to enter into a long-term agreement with IES to utilise IES’ retained logistics assets for the storage and throughput of crude oil and related products necessary for the operation of these newly acquired assets.
“We believe this transaction will prevent any disruption to the supply of fuel to meet Hawaii’s electric generation needs,” said William Pate, President and CEO, Par Pacific. “The closure of one of Hawaii’s refineries was anticipated in 2014 by the governor’s Hawaii Refinery Task Force. As the owner and operator of Hawaii’s remaining refinery, we recognise our role in meeting the essential demand for petroleum products today and to ensure continuity and a smooth and practical transition to Hawaii’s clean energy future.”
Par Pacific expects to hire approximately 65 IES employees in connection with the acquisition. New employees will receive benefits comparable to those provided to Par Pacific’s existing employees. Par Pacific anticipates hiring another 20 employees at its Kapolei refinery in conjunction with the new investment.
With IES’ announced shift to operations of a large-scale open access import terminal, Par Pacific anticipates continued strong competition from the existing market participants, as well as from potential new entrants.
The transaction is expected to close before the end of the fourth quarter and is subject to certain closing conditions.
For more information, visit: www.parpacific.com
3rd September 2018