PBF Energy 2012 Annual Report Download - page 58

In connection with our re-start of the refinery, we received a $20.0 million loan from the State of Delaware
which converts to a grant contingent upon our continued operation of the refinery and certain other conditions.
The State of Delaware also agreed to reimburse us $12.0 million in the aggregate for the dredging of the
Delaware River near the refinery over the next six years, granted us $1.5 million to fund employee training
programs, and granted us $10.0 million towards the conversion of the gas turbines at the refinery to run on
natural gas and reduce emissions. As of December 31, 2012, the State of Delaware has funded us $6.0 million in
dredging cost reimbursements, $1.4 million to fund employee training programs, and $10.0 million for the
turbine natural gas conversion at the refinery.
We also obtained a new operating agreement for the Delaware City refinery that defers the construction of
previously scheduled cooling water towers that the prior owner planned to spend in excess of $100.0 million to
install. The deferral allows us to evaluate the cost effectiveness of closed loop cooling water systems and propose
alternatives to be implemented in the next permitting cycle, which is at least five years away. The permits issued
pursuant to the new operating agreement provide a plant-wide limit for certain emissions rather than source
specific limits. Based on our shutdown of the gasifier unit and the resulting reduction of certain emissions by
converting the combustion turbines to natural gas, we avoided additional controls on specific sources that the
prior owner anticipated spending approximately $200.0 million to install. As a result of these negotiations, we
believe we now have the operational flexibility to manage our emissions in a cost effective manner.
The Delaware City refinery has a throughput capacity of 190,000 bpd and a Nelson Complexity Index of
11.3. It is located on a 5,000-acre site, with access to waterborne cargoes and an extensive distribution network
of pipelines, barges and tankers, truck and rail. Delaware City is a fully integrated operation that receives crude
via ship or barge at its docks located on the Delaware River. The crude and other feedstocks are transported, via
pipes, to an extensive tank farm where they are stored until processing. In addition, there is a 17-bay, 50,000 bpd
capacity truck loading rack located adjacent to the refinery, and a 23-mile interstate pipeline that is used to
distribute clean products.
Acquisition of Paulsboro Refinery
We acquired the entities that owned the Paulsboro refinery (including an associated natural gas pipeline) on
December 17, 2010, from Valero for approximately $357.7 million, excluding working capital. We paid the
purchase price with cash funded from equity and a $160.0 million seller note (the “Paulsboro Promissory Note”),
which we repaid in February 2012 with proceeds received through the issuance of PBF Holding Senior Secured
Notes. The purchase price excludes inventory purchased on our behalf by MSCG and Statoil. The acquisition
was accounted for using the acquisition method of accounting. The purchase price was allocated to the assets
acquired and liabilities assumed based on their estimated fair values. The results of operations of the Paulsboro
refinery have been included in our combined and consolidated financial statements as of December 17, 2010. We
invested approximately $60.0 million in capital in early 2011 to complete a scheduled turnaround at the refinery.
Paulsboro has a throughput capacity of 180,000 bpd and a Nelson Complexity Index of 13.2. The Paulsboro
refinery is located on approximately 950 acres on the Delaware River in Paulsboro, New Jersey, just south of
Philadelphia, and approximately 30 miles away from Delaware City. The refinery generally processes a variety
of medium and heavy, sour crude oils.
Acquisition of Toledo Refinery
Through our subsidiary, Toledo Refining, we acquired the Toledo refinery on March 1, 2011, from Sunoco
for approximately $400.0 million, excluding working capital. We paid the purchase price with cash funded from
equity and a $200.0 million seller note (the “Toledo Promissory Note”), which we repaid in February 2012 with
proceeds received through the issuance of PBF Holding Senior Secured Notes. We also purchased refined and
certain intermediate products in inventory for approximately $299.6 million with the proceeds from a note
provided by Sunoco that we subsequently repaid on May 31, 2011 with proceeds from our ABL Revolving Credit
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