Houston, TX, August 25, 2020 --(PR.com
)-- U.S.-owned Searaven Glauben, LLC. (SGLLC) and Pelican Refinery, LLC. (PRLLC) announce the signing of an agreement for SGLLC to acquire all PRLLC assets, subject to final due-diligence report approval and other conditions. The agreement includes an 18,000-bpd asphalt (Bitumen) refinery located in Lake Charles, Louisiana, as well as other related assets.
SGLLC intends to increase the Lake Charles refinery daily production from 18,000-bpd to 60,000-bpd.
As a privately-owned refining company based in Louisiana, PRLLC has proudly served the Southeast region since 2005, providing a secure energy supply to customers across the United States.
SGLLC recently signed a $3.6 billion, 5-year (with 5-year option to extend) contract with a credit-worthy international client. Due to the scarce supply of Bitumen, SGLLC is employing an aggressive vertically integrated supply strategy to meet the production requirements of this milestone agreement.
SGLLC intends to source its raw Bitumen from Canada through the acquisition of E&P Canadian suppliers. Acquired raw Bitumen will be transported to Louisiana, as well as a proposed second refinery in a to-be-determined Caribbean nation. Upon completion, the new refinery will process an additional 60,000-bpd.
SGLLC’s Board stated, “Canada has one of the world’s largest reserve of Bitumen, but that industry has suffered from a lack of strong demand for various reasons including transportation infrastructure, environmental, and demand. However, we believe that by using raw Canadian Bitumen to produce paving-grade asphalt, Canadian firms would benefit from a long-term, fixed-priced cost that will cover operating expenses and profits. Relying on WCS (Western Canadian Select) and WTI (West Texas Intermediate) to drive profitability has partly led to the challenges that Canadian E&P firms are facing.”
“By focusing our business model exclusively on the production of asphalt, we will be in a position to offer lower priced product on long term contracts ensuring a ‘smoothing of income,’” SGLLC’s management said with respect to the transaction. “We realize that the energy markets are based on indexes such as WCS, Brent, and WTI. However, while our approach is transitional in the industry, it makes sense when the customers are able to secure better asphalt prices even when oil refineries scuttle productions due to low demands for gasoline, diesel, jet fuel, and other products that traditional refineries are designed to produce.”
“After nearly eight months of negotiations, we are happy to reach an agreement on this sale,” SGLLC’s Board of Directors and PRLLC’s Trustee said in a joint statement.
The combined facilities will have a refining capacity of approximately 120,000 barrels per day, and 5.4 million metric tons of Bitumen, annually.