CALGARY, Alberta -- Suncor Energy Inc. said that its U.S. subsidiary has expanded its refining operations by acquiring a Valero Energy Corp. refinery adjacent to Suncor's refinery in Commerce City, Colo., just outside of Denver.
Suncor Energy (U.S.A.) Inc. has purchased the Colorado Refining Co., an indirect, wholly owned subsidiary of Valero. The purchase price was $30 million U.S. ($37 million Canadian) plus working capital and associated oil and product inventory.
Colorado Refining's principal assets are Valero's Commerce City [image-nocss] refinery and a products terminal located in Grand Junction, Colo. The purchase is not subject to regulatory approval.
The 30,000-barrel-per-day (bpd) refinery is located next to Suncor's existing refinery, which was acquired in 2003. Suncor intends to fully integrate the two operations, providing a combined refining capacity of approximately 90,000 bpd.
With the purchase, Suncor is assuming Valero's 140 employees and union obligations. Suncor will continue to provide refined products to retail customers through Phillips 66 gas stations in Colorado and to commercial customers throughout the U.S. Rocky Mountain region.
This acquisition provides an immediate expansion of our presence in the Rocky Mountain marketplace, said Rick George, Suncor's president and CEO. With a capacity of 90,000 [bpd], the integrated operation is expected to be more competitive with refineries in Texas and Oklahoma.
Valero's chairman and CEO Bill Greehey added, These two plants belong together under one company because they are much stronger and have a much brighter future together than either has individually. In addition to Suncor providing employees with compensation and benefits programs comparable to ours, the integration of these operations will provide greater opportunities for growth and a brighter future.
Suncor, which operates an oil sands production facility in northern Alberta, Canada, has long-term plans that include integrating its growing crude oil production into the U.S. energy market through investments in refining assets; however, local crude oil suppliers currently providing feedstock to the Valero refinery would not be affected by the transaction.
With a target to increase our oilsands production to more than a half million barrels per day, building stable access to strategic markets is a key part of our long-term growth strategy, said George.
Suncor will continue seeking additional downstream integration opportunities as part of its growth strategy. Such opportunities could include long-term contracts, joint ventures and the potential purchase of further refining assets or the expansion of Suncor's existing assets.
Suncor Energy Inc. is an integrated energy company headquartered in Calgary. Suncor's oil sands business, located near Fort McMurray, Alberta, extracts and upgrades oil sands and markets refinery feedstock and diesel fuel, while operations throughout Western Canada produce natural gas. Suncor operates a refining and marketing business in Ontario with retail distribution under the Sunoco brand. U.S. downstream assets include refining operations in Colorado and retail sales in the Denver area under the Phillips 66 brand.
San Antonio-based Valero Energy owns and operates 15 refineries throughout the United States, Canada and the Caribbean. It also operates more than 4,700 retail and wholesale branded outlets in the United States, Canada and the Caribbean under brand names including Diamond Shamrock, Shamrock, Ultramar, Valero and Beacon.