Delek US Sells California Refining & Pipeline Assets
BRENTWOOD, Tenn. — Delek US Holdings Inc. signed and closed the sale of AltAir Paramount LLC and Delek's Paramount, Calif., refining and pipeline assets to an affiliate of Boston-based World Energy LLC.
The sale includes all of Delek's membership interests in AltAir Paramount, which operates a 3,000-barrel-per-day renewable diesel/renewable jet fuel facility; Delek's idled Paramount refinery; and associated pipelines and storage tanks.
Based on Delek's ownership interest in AltAir Paramount, the transaction should result in expected proceeds to Delek of approximately $72 million. That number takes into consideration estimated working capital, Delek US' portion of the biodiesel tax credit for 2017, and deal costs.
"We have been focused on deriving value from our non-core assets in California as they are outside of our geographic footprint. This marks the second step in this process following the announced agreement to divest five west coast asphalt terminals for $75 million," said Uzi Yemin, chairman, president and CEO of Delek.
"The Paramount transaction provides additional cash to Delek and should enable us to reduce costs. We continue to evaluate options for our Long Beach and Bakersfield assets. Cash proceeds from this and future transactions could be used in our capital allocation program to return cash to shareholders," he added.
Vandewater Capital Holdings was the lead investor and controlling shareholder of AltAir Fuels from its inception in 2013 until Delek acquired a controlling stake in October 2015. Vandewater brought AltAir from concept to a leading refinery of renewable fuels.
"We are very proud of what we were able to accomplish here," said Jason Aintabi, Vandewater's founder, and previous chairman and CEO of AltAir. "AltAir is a globally recognized facility that has helped pioneer an era of impact investment in America's energy future. Our sustainable fuels are proudly used by the Department of Defense, United Airlines, UPS as well as other prominent companies."
Brentwood-based Delek is a diversified downstream energy company with assets in petroleum refining, logistics, asphalt, renewable fuels and convenience store retailing. The refining assets consist of refineries operated in Tyler and Big Spring, Texas; El Dorado, Ark.; and Krotz Springs, La., with a combined nameplate crude throughput capacity of 302,000 barrels per day.
Its convenience store business is the largest 7-Eleven licensee in the United States and operates approximately 300 convenience stores in central and west Texas and New Mexico.
The logistics operations consist of Delek Logistics Partners LP.