Jan 8 Tesoro Corp announced plans on Tuesday to shutter its 93,500 barrel per day Kapolei, Hawaii, refinery in April and utilize the site as an import, storage and distribution terminal.
Tesoro had been marketing the refinery with the goal of cutting a deal to sell the plant by the end of 2012.
"The number of potential buyers was not many to start with," said Al Troner, president of Houston-based Asia Pacific Energy Consulting. "It comes down to the idea that you have a distant, small market without much potential to expand. Eventually the futility of the facility does not bear putting any more investment into it."
Tesoro said it expects to take a one-time charge between $1 and $1.10 per share in the fourth quarter. Analysts' average per-share forecast for the fourth quarter was $1.51, according to Thomson Reuters I/B/E/S.
"The company also expects to realize between $300 million and $350 million in cash by the end of 2013, driven by a reduction in working capital needs as a result of this conversion," Tesoro said in an announcement.
The Hawaii refinery imports crude oil to refine in Hawaii.
Chevron Corp. operates a 54,000 barrel per day refinery in Ewa Beach, Hawaii.