Island Energy Services Shifting Focus to Retail Ops, Logistics
KAPOLEI, Hawaii — Island Energy Services (IES) is shifting its strategic focus to dedicated logistics and retail operation while ceasing its refining operations.
The company announced it has reached an agreement to sell select refinery assets to Par Pacific Holdings Inc., which intends to utilize the acquired assets for continued refining operations to supply fuel to IES. This will allow IES to fulfill certain utility fuel supply contracts in Hawaii, the company stated.
In connection with the deal, IES has agreed to enter into a long-term agreement with Par to provide fuel storage and throughput services.
To supply its customers, IES plans to continue to source petroleum products from its existing network of local and global suppliers. It does not expect any disruption to Hawaii's supply of petroleum products as a result of the transaction.
IEs reported that it expects to reinvest net sale process in Hawaii to further expand its logistics infrastructure, which includes a network of tank farms, pipelines and other distribution assets. These planned investments are intended to ensure IES remains well-positioned as a long-term valued supplier of fuel products in Hawaii, the company said.
Additionally, IES plans to expand its retail operations by opening a new Texaco-branded gas station in Kapolei in early 2019, followed by other new locations throughout Hawaii.
"We recognize the impact this transaction will have on all of our employees and we are committed to supporting each of them during this transformation of the business," stated Jon Mauer, CEO of IES. "Our immediate and long-term focus is to continue to reliably service our customers, both through this transition and beyond.
"This shift in operations better positions IES as an integrated logistics provider, anchored by our large-scale Kapolei import terminal. We look forward to maintaining our role as a trusted local fuel supplier for the state as we respond to changing market conditions, industry regulations and Hawaii's long-term energy mandate."
Closing of the transaction is subject to customary closing conditions, including certain regulatory and compliance matters. IES expects the deal to close before the end of the fourth quarter of 2018.
IES and Par Pacific Holdings will continue to operate as independent competitors followed the sale.
Island Energy Services LLC is a Hawaii-based fuels marketing and logistics business providing petroleum products for the State of Hawaii. Its retail network includes 56 Texaco branded gas stations.