Valero Energy Corp. said May 20 has entered into an agreement to acquire The Dow Chemical Co.'s 45% interest in the Total Raffinaderij Nederland N.V. (TRN) for an estimated $725 million.
TRN owns a crude oil refinery located in the Zeeland region of The Netherlands on the river Scheldt and has total throughput capacity of 190,000 barrels per day. The transaction is subject to regulatory approval as well as a right-of-first refusal held by Total S.A., the refinery operator and owner of the remaining 55% interest in TRN. The transaction is expected to close in the third quarter of 2009.
Originally built in 1973, TRN's refinery received major upgrades in the mid-1980s, mid-1990s, and throughout this decade. The refinery has a large, distillate-hydrocracking unit with capacity of 68,000 barrels per day. TRN also owns an interest in the Massvlatke Olie Terminal in Rotterdam, which is one of the largest oil terminals in the world.
"This acquisition represents an exceptional entry point for Valero into the European market," said Valero Chairman and Chief Executive Officer Bill Klesse. "TRN's large, complex refinery has the flexibility to process a wide variety of discounted feedstocks primarily into diesel and jet fuel within the world's strongest diesel market. Given its location near Rotterdam and with excellent logistics, this acquisition broadens our geographic diversification and provides trading opportunities in the Atlantic Basin that complement our U.S. Gulf and East Coast operations as each company supplies its share of feedstocks and receives its share of refined products. This relatively new refinery has been very reliable, has top-tier performance metrics, and has limited capital requirements for the next few years. With input from Valero's management, Total will continue to operate the refinery."