Valero Energy Corp. (VLO) has received an offer of USD 350 million from PetroChina (PTR) for the idled refinery in Aruba. This acquisition would give state-owned PetroChina a refining foothold near the U.S. Gulf Coast refining hub while allowing Valero, the largest independent U.S. refiner, to get let go of an unprofitable asset.
Valero used the Aruba refinery to only partially refine crude oil, sending the half-finished product to its Gulf Coast operations to complete the process. An analyst at Dahlman Rose & Co explained that if PetroChina buys the refinery to produce fuels, it may mean the company plans to expand its footprint in the region.
PetroChina has shown interest in the Aruba refinery for several years. The Aruba plant has a fairly large coker unit able to process the heavy oil PetroChina would receive from Venezuela into asphalt or coke for industrial furnaces. At USD 350 million, nearly USD 600 million lower than what Valero listed as its book price, the facility could also be used as an oil and fuel storage terminal.