Par Pacific to Buy Select Refining Assets from Island Energy Services Following IES' Announcement of Cessation of Their Refining Operations

Source Press
Company Par Pacific Holdings, Inc. 
Tags Asset Deals, Deals, Refining & Marketing Activities
Date August 29, 2018

Par Pacific to supply petroleum products to IES to assure continued fuel supply to local utilities

Approximately 65 IES employees to be hired by Par Hawaii

Par Pacific to assist in supplying Hawaii's energy needs and support the state's transition to its clean energy goals

Par Pacific to host conference call and webcast at 9 a.m. ET on August 30, 2018

Par Pacific Holdings, Inc. (NYSE : PARR ) ("Par Pacific") today announced that through an indirect subsidiary, it entered into an agreement with Island Energy Services ("IES") to acquire certain refining units for $45 million plus additional amounts 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 utilized by Par Pacific to supplement its existing operations in supplying IES so that IES may fulfill 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 utilize 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 recognize 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.

"We look forward to expanding our team and keeping high-quality energy jobs available in Hawaii," said Jim Yates, President, Par Hawaii, Inc. "With deep local roots and longstanding commitments to Hawaii, our priority has always been to take care of our employees and support our community. We believe this transition represents a best-case scenario for a 'soft landing' for all constituents in the state's transition to a renewable energy future."

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.

Source: EvaluateEnergy® ©2019 EvaluateEnergy Ltd