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Released August 09, 2022 | SUGAR LAND
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Researched by Industrial Info Resources (Sugar Land, Texas)--Integrated energy company Cenovus Energy Incorporated (NYSE:CVE) (Calgary, Alberta) has reached an agreement with BP plc (NYSE:BP) (London, England) to acquire the remaining stake in the 160,000-barrel-per-day (BBL/d) Toledo Refinery in Ohio for $300 million, as Cenovus seeks to boost its downstream operations in the U.S. Cenovus already owns 50% of the refinery. Industrial Info is tracking $12.8 billion worth of projects for Cenovus, $11.6 billion of which are in the U.S. and Canada.
The companies also will enter into a multi-year product supply agreement. The acquisition is expected to close in the fourth quarter, subject to "customary closing adjustments, plus the value of inventory," according to an August 8 company press release.
The transaction will give Cenovus an additional 80,000 BBL/d of downstream throughput capacity, including 45,000 BBL/d of heavy oil-refining capacity, and "provide the company with opportunities to further optimize its heavy oil value chain through integration with its upstream assets. Cenovus expects to realize synergies over the next few years as a result of the transaction, primarily related to the optimization of feedstock and refined product sales, and the longer-term potential to connect the Toledo Refinery with Cenovus's U.S. refining network."
"Fully owning the Toledo Refinery provides a unique opportunity to further integrate our heavy oil production and refining capabilities," said Alex Pourbaix, president and chief executive officer of Cenovus. "Operating the refinery will open up additional synergies and capital efficiency opportunities, including connectivity with our nearby Lima Refinery. This transaction solidifies our refining footprint in the U.S. Midwest and increases our ability to capture margin throughout the value chain."
Subscribers to Industrial Info's Global Market Intelligence (GMI) Petroleum Refining Plant Database can see plant profiles for the Toledo and Lima refineries.
Also in the Midwest, Cenovus expects to finish its estimated $750 million rebuild and upgrade of the Superior Refinery in Wisconsin, by the end of the year. The company is rebuilding a 38,000-BBL/d crude and vacuum unit and 11,000-BBL/d fluid catalytic cracking unit (FCCU) at the refinery, which has been shut down since April 2018 due to a fire and explosion.
"We remain on schedule to restart [the Superior Refinery] by the end of the year," Pourbaix said in a first-quarter earnings-related conference call at the end of April. "With a nameplate capacity of 49,000 barrels per day, Superior will be an important addition to our heavy oil value chain." The Superior Refinery is a key part of Enbridge Incorporated's (NYSE:ENB) (Calgary) 8,600-mile Mainline pipeline network, which Enbridge says has the capacity to transport 2.85 million BBL/d of light and heavy crude oil from Edmonton, Alberta, to the U.S. Midwest and Ontario.
Cenovus also plans to upgrade the crude and vacuum and FCCU units at its Lima Refinery.
The Toledo Refinery isn't the only asset Cenovus recently acquired from BP. In June, Cenovus announced it was purchasing the remaining stake in the Sunrise oil development in northern Alberta, of which it already owned 50%. The site produces 50,000 BBL/d, which Cenovus hopes to increase to 60,000 BBL/d. Industrial Info is tracking $4.65 billion worth of projects at Sunrise, including proposals for new production plants and field expansions. Subscribers to the GMI Oil & Gas Production Project Database can click here for a full list of detailed project reports.
Click here for a full list of detailed reports for projects mentioned in this article, and click here for a full list of related plant profiles.
As part of its recent second-quarter earnings results, Cenovus announced an increase in its capital-spending budget for 2022, to an updated range of between C$3.3 billion (US$2.5 billion) and C$3.7 billion (US$2.8 billion). Half of the increase is due to higher planned investments at Sunrise following the transaction's third-quarter close.
Subscribers can click here for a full list of reports for active global projects from Cenovus.
BP's sale of the Sunrise asset comes as the oil and gas major seeks to exit the carbon-heavy oil sands market, and expand its presence in the Gulf of Mexico through lower-carbon drilling projects and additional processing capacity. For more information, see Industrial Info's June 14, 2022, article - BP Dumps Canada's Oil Sands for More GOM Offshore Drilling.
Industrial Info Resources (IIR) is the world's leading provider of market intelligence across the upstream, midstream and downstream energy markets and all other major industrial markets. IIR's Global Market Intelligence Platform (GMI) supports our end-users across their core businesses, and helps them connect trends across multiple markets with access to real, qualified and validated project opportunities. Follow IIR on: LinkedIn.
The companies also will enter into a multi-year product supply agreement. The acquisition is expected to close in the fourth quarter, subject to "customary closing adjustments, plus the value of inventory," according to an August 8 company press release.
The transaction will give Cenovus an additional 80,000 BBL/d of downstream throughput capacity, including 45,000 BBL/d of heavy oil-refining capacity, and "provide the company with opportunities to further optimize its heavy oil value chain through integration with its upstream assets. Cenovus expects to realize synergies over the next few years as a result of the transaction, primarily related to the optimization of feedstock and refined product sales, and the longer-term potential to connect the Toledo Refinery with Cenovus's U.S. refining network."
"Fully owning the Toledo Refinery provides a unique opportunity to further integrate our heavy oil production and refining capabilities," said Alex Pourbaix, president and chief executive officer of Cenovus. "Operating the refinery will open up additional synergies and capital efficiency opportunities, including connectivity with our nearby Lima Refinery. This transaction solidifies our refining footprint in the U.S. Midwest and increases our ability to capture margin throughout the value chain."
Subscribers to Industrial Info's Global Market Intelligence (GMI) Petroleum Refining Plant Database can see plant profiles for the Toledo and Lima refineries.
Also in the Midwest, Cenovus expects to finish its estimated $750 million rebuild and upgrade of the Superior Refinery in Wisconsin, by the end of the year. The company is rebuilding a 38,000-BBL/d crude and vacuum unit and 11,000-BBL/d fluid catalytic cracking unit (FCCU) at the refinery, which has been shut down since April 2018 due to a fire and explosion.
"We remain on schedule to restart [the Superior Refinery] by the end of the year," Pourbaix said in a first-quarter earnings-related conference call at the end of April. "With a nameplate capacity of 49,000 barrels per day, Superior will be an important addition to our heavy oil value chain." The Superior Refinery is a key part of Enbridge Incorporated's (NYSE:ENB) (Calgary) 8,600-mile Mainline pipeline network, which Enbridge says has the capacity to transport 2.85 million BBL/d of light and heavy crude oil from Edmonton, Alberta, to the U.S. Midwest and Ontario.
Cenovus also plans to upgrade the crude and vacuum and FCCU units at its Lima Refinery.
The Toledo Refinery isn't the only asset Cenovus recently acquired from BP. In June, Cenovus announced it was purchasing the remaining stake in the Sunrise oil development in northern Alberta, of which it already owned 50%. The site produces 50,000 BBL/d, which Cenovus hopes to increase to 60,000 BBL/d. Industrial Info is tracking $4.65 billion worth of projects at Sunrise, including proposals for new production plants and field expansions. Subscribers to the GMI Oil & Gas Production Project Database can click here for a full list of detailed project reports.
Click here for a full list of detailed reports for projects mentioned in this article, and click here for a full list of related plant profiles.
As part of its recent second-quarter earnings results, Cenovus announced an increase in its capital-spending budget for 2022, to an updated range of between C$3.3 billion (US$2.5 billion) and C$3.7 billion (US$2.8 billion). Half of the increase is due to higher planned investments at Sunrise following the transaction's third-quarter close.
Subscribers can click here for a full list of reports for active global projects from Cenovus.
BP's sale of the Sunrise asset comes as the oil and gas major seeks to exit the carbon-heavy oil sands market, and expand its presence in the Gulf of Mexico through lower-carbon drilling projects and additional processing capacity. For more information, see Industrial Info's June 14, 2022, article - BP Dumps Canada's Oil Sands for More GOM Offshore Drilling.
Industrial Info Resources (IIR) is the world's leading provider of market intelligence across the upstream, midstream and downstream energy markets and all other major industrial markets. IIR's Global Market Intelligence Platform (GMI) supports our end-users across their core businesses, and helps them connect trends across multiple markets with access to real, qualified and validated project opportunities. Follow IIR on: LinkedIn.
