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

Duvernay - The Golden Canadian diluent play?

04/08/2014 Growing Canadian production of oil sands bitumen requires diluent to blend it to pipeline flow specifications. The resulting demand for diluent exceeds local Canadian supply from plant condensate p...

Crestwood Midstream expands Permian Delaware Basin project

04/02/2014 Crestwood Midstream Partners LP reports a further expansion of its Willow Lake Project in the Permian Delaware Basin, which includes the conversion of a portion of its Las Animas natural gas gather...

Wood Mackenzie: US tight oil market too robust to bust

03/25/2014 Today, at the American Fuel & Petrochemical Manufacturers annual conference in Orlando, Florida, Wood Mackenzie says there are a number of ways the North American tight oil boom can go bust as ...

WDS-CPECC JV signs contract with Arrow Energy

03/24/2014 WDS Ltd.'s Energy Division, in a joint venture with China Petroleum Engineering & Construction Corp., has signed a field development and operations construction master services agreement with A...

Audubon launches new Opero Energy division

03/22/2014

Audubon has launched its new products division, Opero Energy, which is dedicated to delivering integrated processing products to the oil and gas markets.

More Oil & Gas Financial Articles

Duvernay - The Golden Canadian diluent play?

Tue, Apr 8, 2014

Growing Canadian production of oil sands bitumen requires diluent to blend it to pipeline flow specifications. The resulting demand for diluent exceeds local Canadian supply from plant condensate production – leading to imports from the US of more than 150 Mb/d in 2013 – a figure expected to grow to 460 Mb/d by 2018. That expectation for future import growth is based on the assumption that Canadian condensate supplies would remain relatively flat at about 140 Mb/d. But could the developing Duvernay gas shale play in Western Alberta turn those estimates on their head? .

Crestwood Midstream expands Permian Delaware Basin project

Wed, Apr 2, 2014

Crestwood Midstream Partners LP reports a further expansion of its Willow Lake Project in the Permian Delaware Basin, which includes the conversion of a portion of its Las Animas natural gas gathering system into rich gas service and the construction of an initial cryogenic natural gas processing plant.

Wood Mackenzie: US tight oil market too robust to bust

Tue, Mar 25, 2014

Today, at the American Fuel & Petrochemical Manufacturers annual conference in Orlando, Florida, Wood Mackenzie says there are a number of ways the North American tight oil boom can go bust as the industry continues to wonder how long this trend will last. A drop in global oil price levels (a collapse in the price of Brent due to emerging market down-turn for example) or a significant widening of the differential between global oil prices and inland realizations are some of the reasons the energy research firm highlights.

WDS-CPECC JV signs contract with Arrow Energy

Mon, Mar 24, 2014

WDS Ltd.'s Energy Division, in a joint venture with China Petroleum Engineering & Construction Corp., has signed a field development and operations construction master services agreement with Arrow Energy for Arrow’s domestic gas requirements in Australia.

Audubon launches new Opero Energy division

Sat, Mar 22, 2014

Audubon has launched its new products division, Opero Energy, which is dedicated to delivering integrated processing products to the oil and gas markets.

Most Popular

Oil & Gas Jobs

Search More Job Listings >>
Subscribe to OGFJ