CORRECTED-UPDATE 2-Tesoro to buy BP refinery in $2.5 bln deal
(Corrects in 10th paragraph to show probation ended in March)
Aug 13 (Reuters) - Tesoro Corp said it would buy BP Plc's refinery in Carson, California, and related assets for about $2.5 billion.
Independent refiner Tesoro on Monday said it would pay $1.18 billion for BP's refining and marketing business in Southern California, plus the value of the refinery's inventory at the time of closing. At current prices, the inventory is valued at $1.3 billion.
The 266,000-barrel-per-day refinery is located south of Los Angeles. It is adjacent to Tesoro's 97,000-barrel-per-day Wilmington refinery.
Tesoro said that after an additional capital investment of about $225 million, the deal should generate annual cost savings of $250 million.
The deal includes a retail marketing network of about 800 dealer-operated gas stations, ownership of BP's Arco brand, 51 percent-ownership in a company-operated 400 megawatt cogeneration facility, and other assets.
Tesoro is also buying storage and distribution assets from BP, including more than 100 miles of pipeline, three marine terminals, four land storage terminals and four product marketing terminals. It plans to sell these assets to its master limited partnership, Tesoro Logistics LP, for around $1 billion within a year of closing.
It expects the deal to close before mid-2013. Tesoro said it plans to pay for the purchase with debt and the cash generated from the sale of assets to Tesoro Logistics.
BP said in late July that it was in advanced talks on the sale of the Carson plant, as well as its Texas City, Texas, refinery.
BP announced in February 2011 that it would sell the refineries by the end of 2012 as it reorients its U.S. refining operations to take advantage of Canadian crude supplies.
BP's North American products division, which oversees its U.S. refineries, finished a three-year probation term in March that stemmed from a 2005 explosion that killed 15 people and injured many more at a refinery in Texas City, Texas.
BP also said on Monday that it will sell two processing plants and an associated gathering system in the Texas panhandle to Eagle Rock Energy Partners for $227.5 million. (Reporting by Michael Erman and Matt Daily; Editing by Lisa Von Ahn and John Wallace)
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