The deal is done. Top Marathon Petroleum officials on Wednesday confirmed what The Daily News had reported: The company will complete its acquisition of BP’s Texas City refinery on Friday.
Marathon officials announced that they plan to spend about $1.6 billion to upgrade the refinery, which underwent a $1 billion upgrade after a 2005 explosion killed 15 people and injured 170.
In advance of its takeover, the maintenance warehouse at the refinery was closed Wednesday and isn’t scheduled to reopen until next week as company officials take inventory. Local vendors received letters this week telling them that any orders placed by today will be billed to BP, and any orders after that will be billed to Marathon.
Ohio-based Marathon reached a deal in October to purchase the nation’s fourth largest refinery and other BP assets for $2.5 billion.
Marathon, now the nation’s fifth largest refiner, will jump to No. 4 once the deal for the 475,000 barrel per day BP refinery is complete on Friday. The refinery will be renamed Marathon’s Galveston Bay Refinery.
Marathon already owns an 80,000-barrel per day refinery in Texas City. The two facilities will for the most part operate independently for now, but will have a combined refining capacity of 550,000 barrels per day.
“The Galveston Bay asset acquisition will be an excellent complement to our existing business,” Marathon’s president and CEO Gary R. Heminger said in a conference call Wednesday morning reviewing the company’s fourth quarter earnings report.
“It will augment our ability to process a wide variety of crude oils, provide us additional access to refined product markets and give us a significant refining presence in the western Gulf of Mexico region, which will provide additional balance to our system. It also will increase our brand presence in the Southeast and significantly increase our participation in the chemicals value chain.”
The refinery is one of the largest and most complex in the U.S., with a Nelson Complexity Index of 15.3. This will make it the most complex in Marathon’s refining system.
Ray Brooks, who was the manager of Marathon’s refinery in Robinson, Ill., will be the manager at Galveston Bay Refinery. He has his management team assembled. Many of its members were part of the BP refinery team.
The 206,000-barrel-per-day refinery he managed in Illinois is one of Marathon’s top performers when it comes to safety.
The Texas City refinery had a troubled reputation. It was the site of dozens of workplace deaths, including the fatal blast in March 2005.
It was also the site of a 40-day emissions event in 2010 that — unknown by the community and city emergency management officials at the time — sent 500,000 pounds of toxic chemicals into the air. BP management claims no one was in danger from the month-plus long release, but about 50,000 people are suing the company over the emissions claiming ill health as a result.