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Valero Set to Make Acquisition

SAN ANTONIO -- Valero Energy Corp., is in talks to buy El Paso Corp.'s oil refinery in Eagle Point, New Jersey, Valero Chief Executive Bill Greehey said yesterday.

"We have been talking to them about a group of assets that include Eagle Point," Greehey told Reuters. "We have synergies involved with our Paulsboro [New Jersey] refinery that would make the Eagle Point refinery attractive."

The move could have a significant impact on the convenience store and petroleum marketing industry. In an interview with Convenience Store News last year Greehey said he was interested in acquiring refineries across the country and building up its network of retail units.

In 1999, San Antonio-based Valero acquired a refinery from in California of Exxon Corp. as a condition of its acquisition of Mobil Oil Corp. and subsequently built a network of approximately 100 stores in the state. Greehey yesterday said he is interested in buying any refinery that is on the block in any part of the country except California. "We're looking at all of them," he said.

Valero recently closed a $3.5 billion deal to buy Ultramar Diamond Shamrock (UDS) and is on a mission to become the nation's leading independent refiner, Greehey said. But the company had to sell some California assets -- including the 170,000-barrel-per-day (bdp) Golden Eagle refinery near San Francisco -- to get federal approval for its purchase of UDS.

Valero, which owns and operates 12 refineries in the United States and Canada, estimates its total refinery system throughput at 2 million bpd, and it also has a 5,000-store retail network.

Among U.S. refineries said to be on the sales block are the 95,000 bpd Farmland Cooperative plant in Coffeyville, Kansas; Crown Central's 100,000 bpd plant in Pasadena, Texas and 60,000 bpd plant in Tyler, Texas; and Premcor's 60,000 bpd plant in Hartford, Illinois.
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