Asphalt
Among refiners in the USA located west of the Mississippi River, Alon USA has the second largest asphalt production capacity and operates 12 asphalt terminals with approximately 4.8 million barrels of storage capacity.
Due to the capability of its refineries to process heavy and sour crude oil, Alon USA has developed its asphalt business to maximize the value of the increased supply of residual oil remaining after it processes gasoline and distillate products from these crude oils. We believe Alon USA’s asphalt production capabilities provide the opportunity to realize higher netbacks than those attainable by producing No. 6 Fuel Oil, which is an alternate product produced from residual oil by refiners lacking asphalt production capabilities. In addition, Alon USA’s asphalt production capabilities permit it to realize value from residual oil without the significant costs and expenses required to construct and operate coker units.
The amount of asphalt produced at Alon USA’s refineries, as a percentage of throughput, varies depending on the configuration of the specific refinery, the crude oils processed at each refinery and the techniques used in the refining process. As part of its efforts to maximize the return generated by the production of asphalt, Alon USA has licensed advanced asphalt-blending technology from Fina, with respect to asphalt produced at the Big Spring refinery, and a patented GTR asphalt manufacturing process through Wright with respect to asphalt produced and sold in California.
Alon USA markets asphalt which is produced at its three refineries included in its refining and marketing business and transferred to the asphalt business at bulk wholesale market prices. The asphalt business also conducts operations at and markets asphalt produced by Alon USA’s fourth refinery located in Willbridge, Oregon. The Willbridge refinery is an asphalt topping refinery located on 42 acres and has a crude oil throughput capacity of 12,000 bpd.