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Marathon, BP settle Texas City dispute: Update

19 Jan 2018, 6.11 pm GMT

Marathon, BP settle Texas City dispute: Update

Adds BP reaction.

Houston, 19 January (Argus) — Marathon Petroleum and BP have settled a lawsuit alleging a 475,000 b/d Texas City, Texas, refinery complex was in worse condition than advertised when it was sold in 2013.

Court filings did not disclose terms of the agreement. A motion to dismiss the suit based on the settlement was pending today in federal court.

Marathon and BP declined to comment.

Marathon purchased the refinery and associated terminal assets for about $2.4bn in February 2013. The US independent refiner accused BP of not keeping electrical equipment to federal regulations, not overhauling an aromatics recovery unit as agreed and failing to maintain proper documentation for equipment throughout the refinery, including 3,000 pressure vessels.

A March 2005 explosion at the refinery killed 15 workers and injured 180. BP was fined $84.6mn by federal regulators and agreed to pay $50mn for violating US environmental laws.

Marathon filed suit in October 2016 over the electrical issues. BP at the time accused the refiner of attempting to rewrite the terms of the transaction.

Marathon Petroleum has since integrated the complex with its neighboring legacy 80,000 b/d refinery and operates the combined facility as a single, 571,000 b/d refinery.

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