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    MPC to Purchase BP's Texas City Refinery, Related Assets

    Deal includes contracts for approximately 1,200 branded retail sites.

    FINDLAY, Ohio -- Marathon Petroleum Corp. (MPC) signed a definitive agreement to purchase BP's Texas City refinery. The deal also includes three intrastate natural gas liquids pipelines originating at the facility; an allocation of BP's Colonial Pipeline Co. shipper history; four terminals located in Florida, North Carolina and Tennessee; retail marketing contract assignments for approximately 1,200 branded sites; and a 1,040-megawatt cogeneration facility.

    The base purchase price is $598 million plus inventories estimated at $1.2 billion, MPC stated. The agreement includes an earn-out provision under which Marathon Petroleum could pay an additional $700 million over six years, subject to certain conditions.

    The transaction is expected to be accretive to earnings in the first year of the operation, according to the company. It is expected to be funded with cash on hand and is anticipated to close in early 2013, subject to customary closing conditions and regulatory approvals.

    The refinery, which reportedly produces 451,000 barrels per calendar day, is one of the largest and most complex in the United States. It is strategically positioned to provide products throughout the U.S. Gulf Coast, Midwest and Southeast, as well as into export markets.

    "This world-scale refinery and related assets complement our current geographic footprint and align well with our strategic initiative of growing in existing and contiguous markets to enhance our portfolio. This acquisition will provide MPC the opportunity to capture synergies across our existing Gulf Coast operations; optimize commercial and process improvements; expand our retail presence in the Southeast; and enhance our ability to sell products into export markets," stated MPC President and CEO Gary R. Heminger.  

    "The acquisition of these assets at an attractive price provides the opportunity to add significant long-term value to our shareholders. We are pleased that MPC's financial performance and cash generation allow us to continue our balanced approach of making value-enhancing investments in the business and returning capital to our shareholders," he continued.

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