HollyFrontier buys Petro-Canada Lubes

Canada's largest lubes producer will be added to HollyFrontier's portfolio.


HollyFrontier logo

The deal, announced on the last day of October 2016 and subject to government approvals, sees the Dallas-based independent petroleum refiner become the fourth largest lubes producer in North America, boosting its overall capacity to 28,000 bpd, equating to 10% of total production in the region.

HollyFrontier Corporation agreed to pay CAD$1.125bn ($845) to Petro-Canada owner, Suncor Energy and will fund the deal with a combination of cash and debt finance.

The acquisition includes Canada's largest base oil production plant in Mississauga, with a 15,600bpd capacity and North America's only high margin Group III base oil output.  It also produces a range of finished lubricants, including specialist productrs and white oils.

According to HollyFrontier, the plant generated some $150m of EBITDA over the year from June 2015-16.

As part of the deal, the US company will also add R&D, global sales, distribution and a brand portfolio to its already sizeable refining business.

George Damiris, President and CEO of the new owners, commented, “This transformative acquisition will diversify HollyFrontier with the addition of a differentiated high margin business with more stable cash flows. Petro-Canada Lubricants is a great business, which combined with our existing Tulsa Lubricants business creates scale and will create a strong platform for growth."