Exxon Selling Troubled Calif. Refinery
Officials of both the buyer and seller are mum about the construction required to restore to full operation Exxon Mobil Corp.'s Torrance, Calif., oil refinery, which lost 80% of its capacity in a February 2015 explosion. On Sept. 30, PBF Energy Inc. announced it would purchase the 155,000-barrel-per-day refinery and its logistics-related assets from Exxon for $537.5 million-plus working capital, to be valued at closing. The refinery is to be restored to full working order before the deal's expected close in 2016's second quarter.
Four people were injured in the explosion, which destroyed the electrostatic precipitator (ESP). The refinery was supplying 20% of California's gasoline, and prices soared when its production was reduced. To restore production, Exxon offered to restart an old ESP, but the South Coast Air Quality Management District rejected that. "We required a greater degree of control for the fine particulates," says a spokesman.
California OSHA hit Exxon with 19 citations and $566,600 in fines; Exxon is appealing. The Chemical Safety Board also has investigated, but "we have not yet released a report or recommendations," a spokeswoman says. "The electrostatic precipitator that blew up is being repaired," says a California Dept. of Industrial Relations spokeswoman. "Repairs are estimated to be complete by February 2016."
On Oct. 1, Exxon Mobil Corp. also was fined $2.63 million by the U.S. Pipeline Safety Office for the March 29, 2013, failure of the oil major's Pegasus Pipeline, which resulted in the release of 5,000 bbl of oil near Mayflower, Ark. In a separate action on the same day, the Pipeline and Hazardous Materials Safety Administration announced proposed regulations to make critical safety improvements for hazardous liquid pipelines. The measures seek to strengthen the way hazardous liquid pipelines are operated, inspected and maintained in the U.S.
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