April 14, 2011 [San Antonio Express News/OPIS] - NuStar Energy LP has won a months-long court process to become the owner of AGE Refining Inc., a local maker of jet fuel that has been operating in Chapter 11 bankruptcy.
Federal bankruptcy Judge Leif M. Clark on Thursday approved NuStar as AGE’s buyer at the end of a sometimes contentious six-hour hearing.
Nustar beat out two other bidders – United Refining and Calumet Specialty Products.
“We are very excited about acquiring this refinery because it’s great news for our hometown of San Antonio,” NuStar CEO Curt Anastasio said. The plant can process 14,500 barrels of oil a day.
Anastasio said NuStar has set aside $35 million to invest in upgrading the plant, including constructing a new office building at the plant site. “We have to do environmental cleanup and solve some drainage problems the plant has,” he said.
NuStar’s acquisition includes a 32,000 m3-terminal in Elmendorf.
Refining isn’t a new industry for NuStar, Anastasio told the court. It owns two asphalt plants, as well as pipelines, storage and terminals, including assets abroad.
“We have a lot of refining expertise in-house,” he said, and have the means to maximize the plant’s profitability.
“We expect the refinery to generate attractive returns, and it is projected to be immediately accretive to our earnings and distributable cash flow. And we can lock in guaranteed margins through the futures market for crude, distillates and gasoline-related products for the next three to four years,” said Curt Anastasio, president and CEO of NuStar Energy LP and NuStar GP Holdings LLC.
AGE’s refinery can process 14,5000 barrels of oil a day, and is processing more crude from South Texas, including the rapidly developing Eagle Ford shale, Anastasio said.
