Exxon Mobil Corp. is moving forward with the sale of the Billings oil refinery in Montana, which it has operated since 1949.

In an Oct. 20 release, Exxon Mobil said it had reached an agreement with Houston-based Par Pacific Holdings Inc. for the sale of the Billings refinery and select midstream assets in Montana and Washington. Par Pacific separately listed the base purchase price of the transaction at $310 million “plus hydrocarbon and other inventory to be valued at closing.”

For Exxon Mobil, the sale ends a year-long effort by the U.S. oil giant to further reduce its refining footprint and concentrate production on plants along the U.S. Gulf Coast and in the Midwest. It also has been selling oil producing properties to boost returns.

“Exxon Mobil is focused on investing in facilities where we can manufacture higher-value products such as lubricants and chemicals,” Karen McKee, president of ExxonMobil Product Solutions, commented in the company’s release.

The 63,000 bbl/d Billings refinery is a high-conversion, complex refinery, which processes low-cost Western Canadian and regional Rocky Mountain crude oil grades.

Par Pacific said it is evaluating renewable fuels opportunities to supplement the Billing refinery’s conventional fuel production and utilize its existing market position in Washington to reduce the carbon intensity of its fuel sales in accordance with the recently enacted Washington low-carbon fuel standard.

The sales agreement also includes the Silvertip pipeline, Exxon Mobil’s interest in the Yellowstone pipeline and Yellowstone Energy LP, and its interests in product terminals in both states. Total storage capacity across the refinery and logistics locations totals 4.1 million barrels.

“This acquisition will significantly enhance our scale and geographic diversification and underpins our focus on pursuing strategic growth initiatives,” William Pate, president and CEO of Par Pacific, commented in the company’s release.

Employees directly supporting these assets and the Billings refinery will be offered positions at Par Pacific. Also, Par Pacific has agreed to continue to supply Exxon- and Mobil-branded service stations in the region.

“We look forward to welcoming the dedicated and highly skilled Billings employees to our team,” Pate continued. “This acquisition expands our fully integrated downstream network in the western United States.”

Par Pacific expects over $30 million in commercial and cost synergies and plans to fund the acquisition with cash on hand and availability under existing credit facilities, based on liquidity of approximately $495 million as of Sept. 30. Hydrocarbon inventory is expected to be financed by a new working capital facility.

The transaction is expected by Par Pacific to be immediately accretive to adjusted net income and free cash flow per share and is expected to close in second-quarter 2023.

Reuters contributed to this article.

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