Parkland Fuel to buy Chevron Canada's downstream fuel business

The Chevron oil refinery is pictured on the shores of the Burrard Inlet in Burnaby, British Columbia August 9, 2012. REUTERS/Andy Clark

(Reuters) - Chevron Corp, the second-largest U.S.-based oil company, sold its Canadian gasoline stations and refinery in British Columbia to Parkland Fuel Corp, a marketer of petroleum products, for C$1.46 billion ($1.09 billion).

Parkland Fuel said it would acquire Chevron’s refining and marketing operations in Canada and pay an additional $186 million toward working capital for the acquired business.

The acquisition adds scale to Parkland and gives the company “significant supply infrastructure and logistics capability to support Parkland’s existing operations,” Parkland CEO Bob Espey said in the statement.

The assets include 129 gasoline stations, three terminals and the Burnaby oil refinery, located east of Vancouver. The refinery can process 52,000 barrels of oil a day. It does not process bitumen, the heavy, tar-like substance extracted from Canada’s oil sands.

Reuters previously reported that Chevron had retained Goldman Sachs to sell the plant.

Chevron is also exploring the sale of its 20 percent stake in Canada’s Athabasca Oil Sands project, which could fetch about $2.5 billion, Reuters reported last week.

Last year, Chevron posted its first annual loss since 1987. The company is working on a two-year plan to sell $5 billion to $10 billion in assets in 2016 and 2017.

The company, aiming to achieve neutral cash flow this year, is also boosting spending on its low-cost Permian shale operations.

Reporting by Gayathree Ganesan in Bengaluru and Jessica Resnick-Ault in New York; Editing by Savio D’Souza and David Gregorio