ously held 75,000-b/sd refinery in Tyler, Tex., and 80,000-b/
sd refinery in El Dorado, Ark., that now have access to about
207,000-b/d of Permian basin crude to satisfy 69% of feedstock requirements for the new system’s more than 300,000-
b/sd overall crude throughput capacity.
Alongside expanded retail, renewables, asphalt operations, the merger results in expanded access for the combined refining system to enable expanded distribution and
marketing of finished products, including 450,000 bbl/
month of space on Colonial pipeline.
Now one of the largest buyers of Permian-sourced crude
among the independent refiners, the combined company has
expanded access to crude oil pipelines, trucking, and gathering operations in the area—including Delek Logistics’s
RIO joint-venture crude pipeline in west Texas—to further
support Delek Logistics’s ability to expand its current operations in the Permian basin.
In November, Husky Energy Inc., Calgary, completed its
acquisition of Calumet Specialty Products Partners LP sub-
sidiary Calumet Superior LLC’s 47,500-b/cd refin-
ery in Superior, Wis., and other regional down-
stream assets (OGJ Online, Nov. 9, 2017; Aug. 14,
2017). Alongside the refinery—which processes
a mix of light and heavy crudes delivered to the
plant via the Enbridge pipeline system from North
Dakota’s Bakken shale formation and western Can-
ada, which in 2016, included the following grades:
North Dakota Sweet (e.g., Bakken), Superior Cana-
dian Heavy, Canadian Synthetic, and Mixed Sweet
• A combined 3. 6 million bbl of crude-product storage.
• The proprietary pipeline connecting the refinery to the
Magellan pipeline system.
• The on-site Superior product terminal and truck-rail
• The off-site Duluth product terminal and truck rack in
• The off-site Crookston and Rhinelander, Wis., asphalt
terminals and truck racks.
• The leased Duluth marine terminal.
• Certain crude-gathering assets and line space in North
Dakota, including lease-automatic custody transfer stations
at Stanley, Beaver Lodge Station and Alexander.
• Certain rail logistics assets.
• A wholesale fuels business that fuels to Calumet-branded gas stations throughout Minnesota, Wisconsin, and
Husky, which will retain the refinery’s existing work-force, also previously committed to investing in key capital
projects to improve operational efficiency of the refinery, including Calumet’s earlier planned Superior Flexibility Project (SFP).
Announced in early 2017, the SFP proposes upgrades to
increase the plant’s ability to process a wider variety of crudes
In other new refining news, MMEX Resources Corp.—a
development-stage company focusing on acquisition, devel-
opment, and financing of oil, gas, refining, and infrastruc-
ture projects in Texas and South America—held a ground-
breaking ceremony on Nov. 17 for the first 10,000-b/d phase
of its proposed Pecos County, Tex., refinery near the Sulfur
Junction spur of the Texas Pacifico railroad, about 20 miles
northeast of Fort Stockton. The groundbreaking followed
the Texas Commission on Environmental Quality’s late-Au-
gust approval of MMEX’s project, which will take about 12-
15 months to build, the operator said in a series of releases.
As proposed, the refinery—for which KP Engineering
LP will provide engineering, design, and construction services—also will include a $450-million second phase with
a capacity of 50,000 b/d. MMEX said it plans to begin construction on Phase 1 in earnest following additional site
While definitive timelines for startup have yet to be officially confirmed as financing continues to be solidified,
Fort Worth area, the Texas Gulf Coast, and Mexico
at Presidio—enabling MMEX to leverage existing
rail, roadway, and pipeline infrastructure for both
crude supply and sale of refined products internationally.
Otherwise on the continent, refiners progressed
with a series of mergers, acquisitions, breakups,
and divestments to align with broader corporate
In July, Delek US Holdings Inc., Brentwood, Tenn., completed its purchase of Alon Israel Oil Co. Ltd.’s US-based
refining and marketing subsidiary Alon USA Energy Inc.,
Dallas, which owned and operated a 74,000-b/sd refinery
in Krotz Springs, La.; an idled 70,000-b/sd, three-refinery
complex in California; and through its majority interest in
Alon USA Partners LP, a 73,000 b/sd refinery at Big Spring,
Tex. (OGJ Online, July 3, 2017; Jan. 3, 2017). Intended to
form a larger, more diverse company positioned to take advantage of market opportunities and better navigate the cyclical nature of the petroleum business, the merger enables
the combined company to unlock logistics value from Alon’s
assets through future potential drop downs to Delek Logistics Partners LP, as well as create a platform for future logistics projects to support a larger refining system.
The completed merger follows Delek’s buyout offer to
Alon USA in late 2016 as part of a plan to support the companies’ shared mission to optimize and grow stable cash
flows from an integrated portfolio of refining, logistics, and
retail assets to become a peer-leading enterprise in the refinery space for the long-term (OGJ Online, Oct. 21, 2016).
In addition to Alon USA’s Krotz Springs and Big Spring
refineries, Delek US’s new refining system includes its previ-