Suncor Energy Inc. said Tuesday it has reached an $150-million (U.S.) agreement with ConocoPhillips to acquire its Denver, Colo., refinery, along with 43 Phillips-branded retail stations and associated storage, pipeline and distribution facilities
The deal, done through Suncor's U.S. subsidiary, Suncor Energy (U.S.A.) Inc., also includes the company purchasing current crude oil and product inventories.
"Suncor has been looking to expand its access to strategic markets for some time and this acquisition is an excellent fit for us," says Rick George, Suncor's president and chief executive officer, said in a statement. "Additional refining and storage assets linked by existing pipeline to our growing oil sands production are key to effectively marketing our products into the U.S."
Closing of the deal remains subject to a number of conditions, including approval of the U.S. Federal Trade Commission and other regulatory authorities. Suncor plans to finance the acquisition through internal cash flow.
Upon closing of the acquisition, Suncor will assume the work force of about 585 employees, including about 300 retail employees. Suncor will also assume the existing contract with the local Paper, Allied-Industrial Chemical and Energy Workers International Union.
"Colorado is a growing, dynamic marketplace, and we're excited about expanding our business to this area," Mr. George said. "This acquisition provides us with the flexibility to move our products to the Denver refinery or other customers - and gives us increased control of our product from production straight through to the consumer."
The Calgary-based company said it plans to spend about $175-million to $225-million between 2003 and 2006 to meet new fuels legislation and enable the refinery to integrate Suncor sour crude blends.
Post 2006, Suncor expects to have the potential to integrate as much as 50,000 barrels a day of sweet and sour crude into the refinery.