PBF Energy 2012 Annual Report Download - page 149

PAULSBORO REFINING BUSINESS
NOTES TO FINANCIAL STATEMENTS
1 - BUSINESS DESCRIPTION
The Paulsboro Refining Business (the Business) includes the operations of the Paulsboro Refinery and related
assets. The Paulsboro Refinery is located on 950 acres in Paulsboro, New Jersey, approximately 15 miles south
of Philadelphia on the Delaware River. The refinery has a total throughput capacity, including crude oil and other
feedstocks, of approximately 185,000 barrels per day. The refinery’s main processing facilities include a crude
unit, a coker, a propane deasphalting unit, a fluid catalytic cracking unit, a continuous catalytic desulfurization
unit, and a sulfur recovery unit. The refinery processed primarily sour crude oils into a wide slate of products
including gasolines, distillates, lube oil basestocks and lube extracts, asphalt, fuel oil, petroleum coke, propane
and sulfur. Feedstocks and refined products were typically transported by tanker and barge via refinery-owned
dock facilities along the Delaware River, Buckeye Pipeline Company’s product distribution system into western
Pennsylvania and Ohio, a local truck rack owned by NuStar Energy L.P., railcars, and the Colonial pipeline,
which allowed products to be sold into the New York Harbor market.
The Paulsboro Refinery was acquired by a subsidiary of Valero Energy Corporation (Valero) from Mobil Oil
Corporation (Mobil) on September 16, 1998. References to Valero or Parent herein may refer to Valero Energy
Corporation or one or more of its direct or indirect subsidiaries that were not included in the financial statements
of the Business, as the context requires.
As described in Note 3, the Business was sold to PBF Holding Company LLC (PBF Holding) on December 17,
2010. These financial statements include the operations of the Business through December 16, 2010.
2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
These financial statements have been prepared in accordance with applicable United States generally accepted
accounting principles (GAAP). The financial statements reflect Valero’s historical cost basis in the Business.
The financial statements include allocations and estimates of general and administrative costs of Valero that were
attributable to the operations of the Business. The Business purchased its crude oil and other feedstocks from and
sold its refined products to Valero. Purchases of feedstock by the Business from Valero were recorded at the cost
paid to third parties by Valero, and sales of refined products from the Business to Valero were recorded at
intercompany transfer prices, which were market prices adjusted by quality, location, and other differentials on
the date of the sale. Management believes that the assumptions, estimates, and allocations used to prepare these
financial statements are reasonable. However, the amounts reflected in these financial statements may not
necessarily be indicative of the revenues, costs, and expenses that would have resulted if the Business had been
operated as a separate entity.
The Business’ results of operations may have been affected by seasonal factors, such as the demand for
petroleum products, which vary during the year, or industry factors that may be specific to a particular period,
such as industry supply capacity and refinery turnarounds. In addition, the Business’ results of operations were
dependent on Valero’s feedstock acquisition and refined product marketing activities.
Management has evaluated subsequent events that occurred after December 16, 2010 through June 23, 2011, the
date these financial statements were issued. Any material subsequent events that occurred during this time have
been properly recognized or disclosed in these financial statements.
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