Vertex Energy completes acquisition of Mobile, Alabama, refinery
Vertex Energy Inc. announced April 1 it has completed acquisition of the 91,000-barrel-per-day Mobile, Alabama, refinery and related marine terminal and logistics assets from Equilon Enterprises LLC, doing business as various Shell companies, for a base purchase price of $75 million in cash, together with approximately $25 million related to specified capital expenditures and other closing adjustments. As part of the transaction, Vertex has acquired approximately 3.2 million barrels of product storage, inventory, logistics and distribution assets, more than 860 acres of developed and undeveloped land, together with the Blakeley Island Crude and Products Terminal. At closing, Vertex acquired approximately $165 million in hydrocarbon inventory from Shell that was financed through an intermediation agreement arranged by Vertex.
“The acquisition of the Mobile refinery represents a transformative moment in the history of Vertex, one that positions us to become a leading regional supplier of both renewable and conventional products,” said Benjamin P. Cowart, Vertex president and CEO. “As previously disclosed, we intend to complete the planned conversion of the Mobile refinery’s hydrocracking unit by year-end 2022, positioning us to commence production of renewable diesel fuel at the site beginning in the first quarter 2023.”
In conjunction with transaction financing, Vertex closed on a previously announced $125 million senior secured term loan with a syndicate of lenders. To help manage the inventory and working capital requirements of the transaction, Vertex secured a physical crude oil, feedstock and products supply and offtake agreement with Macquarie Commodities and Global Markets, concurrent with the closing of the transaction. In addition to providing working capital support for conventional crude oil-based feedstocks and products, the agreement will also provide the ability for Macquarie to include the renewable feedstocks and products at the Mobile refinery following the completion of the hydrocracking unit modification, beginning in the first quarter of next year.