Phillips 66 seeks buyer for Alliance refinery
Phillips 66 is seeking a buyer for its 247,000 b/d Alliance refinery in Belle Chasse, Louisiana, as it looks to stem continued losses and move toward lower-carbon businesses.
The company told Argus that a sale is ongoing "in response to market conditions and the evolving energy landscape." The company declined to disclose the asking price.
US investment bank Tudor Pickering Holt said it expects Phillips 66 "would be lucky" to fetch $500mn from a potential buyer.
"[The company's] strategy has long been to use the cash flows from refining to invest in more attractive areas long term like Chemicals and Midstream," the bank said in a research note published this morning. "But as a light sweet crude refinery in a highly competitive region, Alliance is likely one of the least profitable plants in the company's portfolio."
Although rival Shell will receive about $596mn for selling its half of the 340,000 b/d Deer Park refinery in Texas to Pemex, Tudor Pickering expects market conditions have further pushed down refinery valuations since that deal was announced in May.
The Alliance refinery segued from maintenance in September of last year into a temporary shutdown through the end of 2020 amid weak refining margins. Phillips 66 invested in building a new 35-mile, 12-inch hydrogen gas pipeline connecting the facility to hydrogen gas sources earlier this year.
Phillips 66 posted a $729mn loss in its refining business in the second quarter, and recently announced a $150mn investment in battery maker Novonix with an eye on capturing demand for the components amid the energy transition.
By Dylan Chase
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US Supreme Court ends 'deference' to regulators
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Canaries' bio-marine fuel demand hit by ETS exemptions
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Libya’s oil minister asks PM to clarify who's in charge
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