Newspaper article St Louis Post-Dispatch (MO)

Clark Nearing Purchase of Texas Oil Refinery

Newspaper article St Louis Post-Dispatch (MO)

Clark Nearing Purchase of Texas Oil Refinery

Article excerpt

Clark Refining & Marketing Inc. is close to buying a refinery in Port Arthur, Texas, that processes more crude oil each day than both of its current operations combined.

"We think it's a major move," President Paul Melnuk said Friday. "It certainly would give us much greater critical mass."

Clark, which has headquarters in Clayton, is deep into exclusive negotiations to buy the 177,000-barrel-a-day refinery from Chevron Corp. "Discussions and negotiations are well advanced and moving toward the completion of a definitive purchase and sale agreement," Melnuk said.

If the inspection team Clark sends to Port Arthur is satisfied that the operation holds no surprises, the two companies should have a deal by the middle or end of May, Melnuk said.

If government regulators then approve the transaction, the refinery could change hands in the fourth quarter of this year.

The refinery, about 100 miles east of Houston, is one of the oldest in the nation.

It opened in 1902 but has been expanded and modernized several times. Because operators in the early days stored and even transported oil in wooden containers and conduits, the site has environmental problems.

Under the deal Clark is proposing, Chevron would keep the liability for cleaning up the property.

Clark currently operates a 60,000-barrel-a-day refinery in the Metro East village of Hartford, and a 70,000-barrel-a-day refinery outside Chicago, in Blue Island, Ill.

Clark sells about half of the gasoline it produces at those refineries through its retail network, which consists of about 850 Clark stations in 13 states. It sells the rest on a wholesale basis to other companies, which resell the fuel under different names.

Clark also would sell the additional output from Port Arthur on the wholesale market.

Unlike the Hartford and Blue Island refineries, the Port Arthur is operation already capable of producing the cleaner-burning gasoline and diesel fuel envisioned under new environmental regulations, Melnuk said. …

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