September 22, 2014 / 5:41 PM / 5 years ago

UPDATE 1-Carlyle to take Philadelphia refinery logistics public

(New throughout, adds details on JP Morgan offtake agreement)

Sept 22 (Reuters) - Philadelphia Energy Solutions, a joint venture part owned by Carlyle Group LP, disclosed plans on Monday to sell shares in an oil rail unloading system it built at the 335,000 barrel-per-day Philadelphia refinery it took over two years ago.

The refinery, the largest on the U.S. East Coast, has used the new unloading system to bring in less-expensive crude from the booming Bakken shale fields. This has helped turn operating deficits at the refinery into profits during the first half of this year, according to the initial public offering filed with U.S. regulators.

Once a new rail track is complete next month, the unloading capacity at the facility will go from 140,000 bpd to 210,000 bpd, or about 63 percent of the refinery’s overall capacity, the filing stated.

This train-unloading system would be the main asset of PES Logistics Partners LP, a master-limited partnership whose main customer will be the refinery.

The IPO filing disclosed details of Philadelphia Energy Solution’s offtake agreement with JP Morgan Chase & Co, which is close to selling its physical commodities business to Swiss trading house Mercuria.

The offtake agreement expires in September 2017, but can be terminated with 90 days notice prior to Sept. 8, 2015 or Sept. 8, 2016, according to the filing.

Under the agreement, JP Morgan supplies nearly all of the crude oil to the Philadelphia refinery and purchases nearly all of its refined products.

BofA Merrill Lynch and Credit Suisse are underwriting the IPO, PES Logistics told the U.S Securities and Exchange Commission in a preliminary prospectus on Monday.

The filing included a fundraising target of about $250 million. (

The amount of money a company says it plans to raise in its first IPO filings is used to calculate registration fees. The final size of the IPO could be different. (Reporting by Avik Das in Bangalore and Jarrett Renshaw in New York; Editing by Maju Samuel, Jessica Resnick-Ault and Marguerita Choy)

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