June 9 TrailStone, a start-up commodity merchant backed by private equity firm Riverstone Holdings LLC, has gained entry to the North American physical oil markets with a deal to buy a small refinery and logistics firm in the Pacific Northwest.
In its first major deal since launching a year ago, TrailStone paid an undisclosed sum to buy U.S. Oil and Refining Co.'s 42,000 barrel per day refinery in Tacoma, Washington, the company said in a statement Monday.
It will also gain 2.7 million barrels of storage capacity, a fleet of 630 rail cars, several barges, and a deepwater terminal along the coast, which is emerging as an important hub for shipping Bakken and Canadian crude.
Astra bought the refinery in 2006. The trader, a unit of Astra Transcor Energy N.V., a holding company registered in Rotterdam, ran a physical trading business around the asset. Because Riverstone operates Canadian upstream assets, TrailStone may be able to use the refinery to position itself in physical markets.
"TrailStone endeavors to be a leading global asset-backed, logistics and trading company," Chief Executive Officer David Silbert said. "This transaction represents a significant advancement to that end."
U.S. Oil started receiving about 40,000 bpd of Bakken crude in November 2012 when its offloading operation began. The refinery was the second on the West Coast to start rail offloading, after Tesoro Corp.'s plant at Anacortes, Washington.
The refinery has a dedicated jet fuel pipeline to Joint Base Lewis-McChord, a U.S. military installation close to Tacoma, Washington.
The company didn't disclose the price paid for the refinery. Deutsche Bank Securities acted as a financial advisor to U.S. Oil. (Reporting by Jessica Resnick-Ault in New York and Kristen Hays in Houston; Editing by Bernadette Baum)