Hess to pursue sale of terminal network and exit refining business

Hess Corp. announced Jan. 28 that it will pursue the sale of its terminal network in the US and also complete its exit from the refining business by closing its Port Reading, New Jersey, refinery.

The terminal network is located along the US East Coast and has a total of 28 million barrels of storage capacity in 19 terminals, 12 of which have deepwater access. The terminals previously served as the primary outlet for Hess’ share of production from its HOVENSA joint venture refinery, most of which was used to supply Hess’ retail and energy-marketing businesses.

With the closure of the HOVENSA refinery in 2012, along with Hess’ ability to access refined products from third parties to supply these marketing businesses, the terminal system is no longer core to the company’s operations. The company’s St. Lucia oil storage terminal in the Caribbean, with 10 million barrels of capacity, will also be included in the package for divestiture.

In addition to the proceeds from the sale of the terminal network, the transaction should also release approximately $1 billion of working capital for redeployment to fund Hess’ future growth opportunities.

The Port Reading refinery, which will be closed by the end of February, comprises solely a fluid catalytic cracking unit, and it primarily manufactures gasoline and components used for blending heating oil. The refinery incurred losses in two of the past three years. The financial outlook for the facility is expected to remain challenged due to the requirement for future expenditures to comply with environmental regulations for low-sulfur heating oil and the weak forecast for gasoline refining margins.

“By closing the Port Reading refinery and selling our terminal network, Hess will complete its transformation from an integrated oil and gas company to one that is predominantly an exploration and production company, and will be able to redeploy substantial additional capital to fund its future growth opportunities,” said John Hess, the company’s chairman and CEO.

Hess has retained Goldman, Sachs & Company as its financial advisor for the divestiture of the terminal network.

Hess Corporation is a  global independent energy company primarily engaged in the exploration and production of crude oil and natural gas, and the marketing of refined petroleum products, natural gas and electricity.

Related Articles

McClendon’s new company raises $2.9 billion

02/21/2014 Former Chesapeake CEO Aubrey McClendon’s new oil and gas venture, American Energy Partners, has been raising some $2.9 billion from investors in a bid to acquire and drill acreage in Ohio’s souther...

Upstream News

02/01/2014

Hess sells Utica dry gas acreage for $924M

01/29/2014 Hess Corp. (NYSE: HES) has entered into an agreement to sell approximately 74,000 acres of its dry gas acreage in the Utica Shale to an undisclosed third party for a consideration of $924 million.

Hess completes sale of Pangkah asset in Indonesia

01/10/2014

Hess Corp. has completed the sale of its Pangkah asset to a subsidiary of PT Saka Energi Indonesia, which exercised its preemption rights, for a total after tax consideration of $650 million.

Hess completes sale of Natuna A asset in Indonesia

12/10/2013 Hess Corp. has completed the previously announced sale of its Natuna A asset, located off the coast of Indonesia, to PT Pertamina and PTT Exploration and Production Co. Ltd. for a total after-tax c...

More Oil & Gas Financial Articles

McClendon’s new company raises $2.9 billion

Fri, Feb 21, 2014

Former Chesapeake CEO Aubrey McClendon’s new oil and gas venture, American Energy Partners, has been raising some $2.9 billion from investors in a bid to acquire and drill acreage in Ohio’s southern Utica shale play.

Upstream News

Sat, Feb 1, 2014

Hess sells Utica dry gas acreage for $924M

Wed, Jan 29, 2014

Hess Corp. (NYSE: HES) has entered into an agreement to sell approximately 74,000 acres of its dry gas acreage in the Utica Shale to an undisclosed third party for a consideration of $924 million.

Hess completes sale of Pangkah asset in Indonesia

Fri, Jan 10, 2014

Hess Corp. has completed the sale of its Pangkah asset to a subsidiary of PT Saka Energi Indonesia, which exercised its preemption rights, for a total after tax consideration of $650 million.

Hess completes sale of Natuna A asset in Indonesia

Tue, Dec 10, 2013

Hess Corp. has completed the previously announced sale of its Natuna A asset, located off the coast of Indonesia, to PT Pertamina and PTT Exploration and Production Co. Ltd. for a total after-tax consideration of $650 million.

Most Popular

Oil & Gas Jobs

Search More Job Listings >>
Subscribe to OGFJ