Marathon Petroleum to purchase BP's Texas City refinery

BP has reached an agreement with Marathon Petroleum Corporation to sell its Texas City refinery and a portion of its retail and logistics network in the south-east US for $2.5bn.

"Since 2010 the company has divested more than $35bn and expects this total to reach $38bn by the end of 2013."

BP global refining and marketing business chief executive Iain Conn said the sale of California refinery and Texas City refinery will allow BP to focus on US fuel investments on the three northern refineries and their associated marketing businesses, which are crude feedstock advantaged.

Since 2010 the company has divested more than $35bn and expects this total to reach $38bn by the end of 2013, to focus on its US downstream business.

As part of the agreement, Marathon Petroleum will purchase the 475,000bpd refinery, natural gas liquids pipelines and four marketing terminals, along with certain jobber contracts, supplying nearly 1,200 retail sites in Tennessee, Mississippi, Alabama and Florida.

BP East of Rockies fuels business president Doug Sparkman said: "A number of valued jobbers are affected by this transaction and we are committed to working very closely with Marathon Petroleum to make this transition as smooth as possible."

Besides divestments in the south-east US, BP is investing heavily in its three northern US refineries.

BP is also modernising and upgrading the Whiting Refinery in north-west Indiana, Cherry Point Refinery in the state of Washington and BP Husky joint venture near Toledo, Ohio.

"When we complete these sales and our Whiting Refinery upgrade project next year, we will have a smaller, well-positioned and highly competitive portfolio of refining and marketing businesses in the US," Conn added.

BP expects the transaction to be closed by early 2013.