The base purchase price of the refinery is about $598m, whereas the inventories are valued at approximately $1.1bn.
Subject to conditions, the agreement also contains earnout provision and MPC can pay up to an additional $700m over six years.
The transaction is expected to be accretive to earnings in the first year of operation.
Marathon Petroleum purchased the 451,000 barrel per day (bpd) refinery along with several related assets including four light product terminals located in the Southeast, three operating intrastate natural gas liquids pipelines originating at the refinery, and a 50,000 bpd allocation of BP’s Colonial Pipeline Company shipper history.
The transaction also includes purchase of retail marketing contract assignments for about 1,200 branded sites representing approximately 61,000 bpd of gasoline sales, and a 1,040MW cogeneration facility
Marathon Petroleum president and chief executive officer Gary R Heminger said the refinery well positioned to help the company gain from the increased supply of North American crude oil.
"The refinery and related assets should enhance our current footprint by integrating well with our existing operations, Heminger added.
"This transaction will provide MPC the opportunity to grow in contiguous markets, expand our export opportunities and further optimize our Gulf Coast operations."
Marathon Petroleum will rename the facility as the Galveston Bay refinery.
