PBF Holding Co. will buy the 185,000 barrels per day Paulsboro refinery for $360 million plus the value of net working capital and inventories, currently estimated at $275 million. PBF of Stamford, Conn., headed by refinery consolidator Tom O’Malley, had been in negotiations with Valero since early this year. The deal is expected to close in the fourth quarter.

In April, PBF purchased Valeros 190,000 b/d Delaware City, Del., refinery for $220 million. The Delaware City plant has been closed since late 2009 because of ongoing operating losses. However, the site is undergoing an extensive turnaround and is scheduled to restart in the first half of 2011.

PBF President Michael Gayda says the company plans to continue to sell base oils ex-Paulsboro, but a new brand name remains up in the air at present. (See related story in this issue of Lube Report.)

In a letter to its customers, Motiva said it will cease production of its Star 3 (API Group II 70 vis) and its Star 5+ (Group II+ 130 vis) grades effective Jan. 1, 2012, providing customers with 15 months of advance notice. Motiva explained that it plans to focus on areas that complement our processing capabilities and operating efficiencies as well as the needs of the marketplace.

Several industry observers speculated that Motivas timing might not be coincidental with the expecting streaming of Shells Pearl gas-to-liquids plant in Qatar or with Motivas Port Arthur crude oil expansion.

Market activity continues at a good pace, according to a number of suppliers. Many are pleasantly surprised by still-strong demand as the fourth quarter approaches – a time when business normally begins to slow. Buying interest for paraffinic and naphthenic grades is healthy across the board, although certain cuts are more in demand than others.

Heavy vis pale oils and neutrals are the more eagerly-sought-after base stocks, say sellers. In a few cases, all of some buyers Group I and II/II+ requirements are still difficult to source, they add.

Group III demand remains exceptionally strong, and finding volumes to cover all of their needs is especially hard, a few consumers note.

Domestic price ideas are holding steady, and there were no changes to postings this week. Export and spot prices are also steady, but remain firm and often equal to or higher than domestic sales. Sources said that there have been only a few offshore trades seen in the last few months.

Looking upstream, crude oil futures spiked higher earlier this week, passing the $77 per barrel mark during intra-day trade on both Monday and Tuesday, before retreating at the close. Whether crude values can be sustained in the upper $70s/bbl remains to be seen. Energy experts opinions are varied on which direction prices will take over the course of the next few months.

At the close of the Tuesday, Sept. 28, NYMEX session, light sweet crude futures settled the day at $76.18 per barrel, up $2.66 compared to the $73.52/bbl close reported one week earlier.

Historic U.S. posted base oil prices and WTI and Brent crude spot prices are available for purchase in Excel format.