Goldman, Kelso IPO Kansas refinery

HoustonPrivately-held Coffeyville Resources, owner and operator of a 108,000 b/d Kansas refinery and of a related fertilizer business, is taking its CRV Energy subsidiary public.

The firm, which is owned by investment funds Kelso and Goldman Sachs, is offering 5.5mn shares of CRV Energy, with an option for underwriters of the deal to acquire an additional 2.325mn shares at the IPO price. CRV Energy will trade on the New York Stock Exchange under the ticker CVI.

Kelso and Goldman acquired Coffeyville Resources in June of 2005, seeing refining as a promising part of their investment portfolio, given the outlook for strong refining margins in the US mid-continent.

Since taking over the former Farmland refinery in Coffeyville, Kansas, the current management has boosted crude throughputs from about 90,000 b/d to about 102,000 b/d and broadened the variety of crude used in the slate. It has also launched an upgrade of the facility that allows it to produce ultra low sulphur gasoline and diesel while running sour Canadian crude accessed through the Cushing, Oklahoma trading hub. The company plans to boost the refinery’s capacity to 115,000 b/d by the end of this year.

CRV Energy will also contain the project’s crude gathering lines and the adjacent nitrogen fertilizer plant. The plant uses gasified petroleum coke to manufacture ammonia, which is further processed to create UAN fertilizer. About 80pc of the petroleum coke used as a feedstock for the fertilizer plant comes from the coker at the Coffeyville refinery.

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