Delek to Buy $1 Billion Refinery

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Delek to Buy $1 Billion Refinery

BRENTWOOD, Tenn. -- Delek US Holdings Inc. is in exclusive negotiations to buy a yet unnamed U.S. refinery with a price tag estimated at roughly $1 billion dollars, reported Dow Jones Newswires.

While the deal is expected to be cemented by the end of July, Paul Pierce, vice president of marketing for Delek's Mapco brand, told CSNews Online he was unable to discuss particulars. "We can’t talk about anything right now," he said. "Our release says it all, which we were required to do by law."

Analysts' speculation has centered on two Oklahoma-based refineries -- Valero Energy Corp. and Sunoco Inc. -- which recently entertained offers, reported Dow Jones Newswires. The Brentwood, Tenn.-based energy company did describe the assets in question to the Securities and Exchange Commission (SEC) as having a capacity between 75,000 and 100,000 barrels a day, metrics which fit the aforementioned refineries.

Delek is also considering buying or entering into wholesale supply agreements with 400 to 450 stores, according to a filing with the SEC. Pierce declined to comment on the nature of those agreements.

When asked when the name would be released, Pierce told CSNews Online: "We are public company and will have a highly orchestrated response with regards to public information."

Industry analysts stated the proposed purchase is daring, considering U.S. refining margins have decreased with high oil prices and weakened gasoline demand. Dow Jones reported that Delek has been seeking to acquire a second refinery since it first went public. Currently, the company operates a single plant in Tyler, Texas, according to the report. In its first filing to the SEC, the company expressed its interest in expanding by acquisition.

Analysts also claim Delek is in the running for another Valero refinery located in Memphis, Tenn., although the plant is larger than its Oklahoma counterpart. "We are not saying anything officially about which companies have expressed an interest in our assets," Bill Day, a spokesman for the San Antonio-based refiner, told Dow Jones.