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Giant Gushing Over Refinery Acquisition

SCOTTSDALE, Ariz. -- Giant Industries Inc. increased its refining capacity twofold yesterday after reaching a deal with London-based BP Plc to acquire BP's Yorktown, Va. refinery.

The deal, expected to close in June, is worth $127.5 million plus the value of inventory at closing, currently estimated to be $42 million. Additionally, the agreement includes potential payments up to $25 million if certain refining margin levels are met from 2003 to 2005.

The Yorktown refinery has a crude oil processing capacity of 62,000 barrels per day. The product slate includes approximately 50 percent gasoline, as well as a wide range of products such as diesel fuel, heating oil and coke. The unit is the only refinery in Virginia and is able to serve local markets, as well as the New York Harbor.

The deal more than doubles Giant's refining capacity to nearly 100,000 barrels per day. Giant said it doesn't anticipate any personnel changes at the refinery after the deal is closed.

"I believe we have found a refining operation with as much flexibility as any in the United States. A portion of the market served by the refinery enjoys local distribution benefits similar to those of our current refinery operations," said Jim Acridge, Giant's chairman and CEO. "Over recent years, the area has enjoyed solid population growth and product demand both in Virginia and the surrounding areas. The refinery personnel and their long-term experience in operating the Yorktown refinery are an ingredient that we are fortunate to inherit."

Giant owns and operates 165 convenience stores and travel centers in New Mexico, Colorado, Utah and Arizona in addition to two oil refineries in New Mexico.
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