Calumet Specialty Products Partners LP declared its initial public stock offering a success last week. Now the company is moving forward with its next capital project – an expansion at its Shreveport, La., refinery that should increase base oil capacity by approximately 2,000 barrels per day.
The Indianapolis-based company sold 6.5 million shares of common stock Jan. 26. The shares sold for $21.50 per share, the mid-point of the $20.50-$22.50 range predicted for the offering ahead of time. The sale netted the company more than $123 million, most of which will be used to pay off debt. The company had said it wanted to lower its debt level to allow it to finance new projects and acquisitions to help it grow further.
We feel very good with how the offering went, Vice President of Investor Relations Jennifer Straumins said Monday. This equity infusion puts us in a good position to move forward with several very large internal projects that were working on.
The first of those projects is a package of improvements at the Shreveport refinery, including construction of a hydrotreating unit and restarting an idled sour crude unit. The project is expected to increase the refinerys crudethroughput capacity by 11,000 b/d by late in the second quarter of 2007. Straumins said that expansion will be spread proportionately across the refinerys existing product slate, meaning that capacity of its base oil plant should rise by approximately 2,000 b/d. The plant currently has capacity to make 8,500 b/d of paraffinic stocks, most of it Group II oils.
Straumins declined to disclose the cost of that project, but said it will be financed using part of $450 million in new debt that Calumet arranged last fall.
The company also plans to restart an idled catalytic cracker and alkylation unit that would increase Shreveports crude throughput capacity by an additional 12,000 b/d. Straumins noted, however, that most of that increase would be for fuels, which Shreveport began making in 2005. The company has not set a schedule for that project and would seek additional financing to pay for it.
Calumets stock is listed on the Nasdaq stock exchange under the symbol CLMT. By the close of business yesterday its price had risen to $24.40 per share.