With the sale, Delek expects to eliminate approximately $14m in annual operating expenses related to the business
Petroleum refining company Delek US has completed the sale of its equity interests in subsidiary Alon Bakersfield Property to a unit of California-based renewable energy company Global Clean Energy Holdings for $40m.
Alon Bakersfield Property owns a refinery in Bakersfield, California.
According to the company, the deal will help Delek remove nearly $14m in yearly operating expenses related to the business.
Furthermore, the completion of the sale will enable the company to eliminate certain environmental and asset retirement liability reserves currently on the balance sheet.
Delek chairman, president and CEO Uzi Yemin said: “We are pleased to announce the sale of the last remaining assets located on the West Coast that were acquired through the Alon acquisition in 2017.
“The sale proceeds and the removal of liabilities from our books should help further strengthen our balance sheet while eliminating the annual expenses associated with that business.”
Delek US had agreed to acquire stake in Wink to Webster Pipeline in Texas in 2019
In 2019, Delek US had agreed to take a 15% stake in the Wink to Webster Pipeline joint venture formed by ExxonMobil, Plains All American Pipeline, and Lotus Midstream.
The joint venture would develop the 1,046km-long Wink to Webster Pipeline designed to transport more than one million barrels of crude oil and condensate per day from the Permian Basin in West Texas to the Texas Gulf Coast.
According to the company, the expected net investment in the 36-inch pipeline system was $340-380m.
Prior to that in 2017, Delek US had agreed to acquire stake it does not already own in Alon USA Energy in a deal worth $675m, including debt and other items.
Under the terms of the deal, the company would acquire the remaining 53% stake in Alon to strength its business in Texas’s prolific Permian basin.