The refinery deal is a bigger deal than folks realize. Another loss for California. I assume North Dakota is watching closely.
Re-posting:
- MPC: "7-11" to buy Marathon's Speedway for $21 billion; link here; at the close on Friday, trading at $38.20/share; Monday: $38.89, pretty much unchanged; Reuters says the deal could fetch between $15 billion and $17 billion;
- MPC: won't re-start two idled oil refineries; one in California; one in New Mexico; link here;
- Martinez, CA: to comply with California's Low Carbon Fuel Standards objectives and greenhouse gas-reduction targets; fourth largest refinery in California
- Gallup refinery, in New Mexico: 26,000 b/d
- May 5, 2020, earnings call: said these refineries were being looked at because they are the company's highest-cost facilities among its sixteen refineries
- note to folks in ND/Mandan refinery: too much global refining capacity and existing refineries will be pressured by new facilities coming online
- MPC: from Reuters --
- Marathon Petroleum plans to permanently close two small U.S. oil refineries in Martinez, California, and Gallup, New Mexico, the company said, eliminating 800 jobs in response to lower fuels demand.
- The largest U.S. refiner by volume had earlier idled the two facilities following weak demand due to COVID-19 outbreaks in the United States. U.S. refiners on average idled about 20% of total processing capacity on falling vehicle and air travel.
- Marathon said it plans to use the Martinez facility as an oil-storage facility and is evaluating its future use to produce renewable diesel, a fuel made from industry waste and used cooking oil. Martinez is California’s fourth largest refinery.
- MPC: Mandan Refinery, Mandan, North Dakota
- since 1954; a very, very old refinery
- 71,000 BPCD capacity
- refined products shipped by rail and truck
- CEOs are making decisions, it seems, with lightning speed;
- total MPC global refining capacity: 3 million BPCD
- Mandan Refinery: 2% of MPC's total refining capacity
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