Or­der by judge ends Valero bid for oil ter­mi­nals

San Francisco Chronicle - - BUSINESS - By Bob Egelko Bob Egelko is a San Fran­cisco Chron­i­cle staff writer. Email: begelko@sfchron­i­cle.com Twit­ter: @egelko

Valero En­ergy Corp.’s one­time plans to buy oil ter­mi­nals in Rich­mond and Martinez, which ran into an an­titrust suit by the state of Cal­i­for­nia, re­ceived their last rites Thurs­day when a fed­eral judge signed an agree­ment by all sides to call off the sale and dis­miss the suit.

Valero, the world’s largest in­de­pen­dent pe­tro­leum pro­ducer, owns a re­fin­ery in Beni­cia and has said its ac­qui­si­tion of the nearby stor­age and dis­tri­bu­tion ter­mi­nals from Plains All Amer­i­can Pipe­line would help con­sumers. The com­pany noted that the Fed­eral Trade Com­mis­sion, which shares over­sight of an­titrust en­force­ment for the fed­eral govern­ment, had not chal­lenged the sale.

But state At­tor­ney Gen­eral Xavier Be­cerra said in his law­suit in July that the pur­chases would put all of the Bay Area’s pe­tro­leum ter­mi­nals un­der oil com­pany con­trol and drive up gaso­line prices.

The two com­pa­nies, both based in Texas, an­nounced last month that they were can­cel­ing the trans­ac­tion be­cause of the costs and un­cer­tain­ties of a law­suit. Thurs­day’s or­der by U.S. District Judge Wil­liam Al­sup of San Fran­cisco, en­dorsed by both com­pa­nies and Be­cerra, pro­hibits any such sale for 10 years.

If Valero nev­er­the­less de­cides to make an­other at­tempt to buy the ter­mi­nals within the next decade be­cause of changed cir­cum­stances, the or­der re­quires the com­pany to no­tify the Cal­i­for­nia at­tor­ney gen­eral’s of­fice in ad­vance so that it can file an­other suit.

While last month’s an­nounce­ment was wel­come news, Be­cerra said in a state­ment, the court agree­ment “goes even fur­ther to en­sure com­pe­ti­tion in the mar­ket­place and to pre­vent mo­nop­o­lies.” He said the out­come “sends a strong mes­sage: Cal­i­for­nia will pro­tect its con­sumers and com­pe­ti­tion so that our state’s econ­omy — the sixth largest in the world — can thrive.”

Valero tried to ac­quire the ter­mi­nals in 2005 as part of its $2.8 bil­lion pur­chase of Kaneb Ser­vices and Pipe Line Part­ners, which owned both fa­cil­i­ties. But af­ter an­titrust ob­jec­tions from both the state and fed­eral gov­ern­ments, Valero agreed to sell the ter­mi­nals.

The com­pany did not im­me­di­ately re­spond to a re­quest for com­ment Thurs­day.

Ro­nen Tivony / NurPhoto / TNS

At­tor­ney Gen­eral Xavier Be­cerra filed suit over the oil ter­mi­nal sales.

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