Marathon suit attempt to renegotiate Texas City purchase terms -BP

Oct 11 (Reuters) - BP Plc on Tuesday said it wouldvigorously defend itself against a federal civil suit byMarathon Petroleum Corp alleging that it had failed todeliver a Texas oil refinery and three products terminals in thecondition promised under a $2.4-billion sales agreement signedin 2012.

"This suit is nothing more than an attempt by Marathon torenegotiate the terms of the Texas City refinery purchase ofalmost four years ago," Geoff Morrell, BP's senior vicepresident of U.S. communications and external affairs, said inan emailed statement.

Marathon took over the 459,000 barrel-per-day (bpd) refineryin Texas City, Texas, and terminals when the transaction closedon Feb. 1, 2013, and began finding problems that breached thesale agreement, according to the lawsuit filed on Monday.

When sold in 2013, the Texas City refinery fulfilled theterms of the sale agreement and met all commitments BP had madeto federal regulators, Morrell said, adding BP tried to resolveMarathon's complaints through mediation.

"It is disappointing that immediately following the firstmediation session, Marathon chose to go to court."

Marathon also alleged BP planned to carry out an overhaul ofan aromatics recovery unit prior to the sale being complete, butdid not do so after signing the sale agreement, according to thelawsuit.

However, BP said it spent billions of dollars in the yearsbefore the sale to upgrade the Texas City refinery.

"Marathon insisted on and received a discounted sales priceso it could make some additional capital investments," Morrellsaid. "Marathon conducted extensive due diligence and was givenvirtually unrestricted access to documents and equipment at therefinery."

The BP Texas City refinery was the site of a March 23, 2005,explosion that killed 15 workers and injured 180 others. BP wasfined $84.6 million by the U.S. Occupational Safety and HealthAdministration between 2005 and 2012 for safety rules violationsfound at the refinery in investigations following the blast.

BP pleaded guilty to a federal environmental law violationand paid $50 million to the U.S. Justice Department in 2009. BPalso paid more than $2 billion to settle lawsuits stemming fromthe 2005 explosion.

Monday's lawsuit was filed in the U.S. District Court forSouthern Texas in Galveston, Texas by Marathon subsidiaryMarathon Petroleum Co LLC against BP subsidiaries BP ProductsNorth America Inc and BP Pipelines (North America) Inc. (Reporting by Erwin Seba in Houston and Vijaykumar Vedala inBengaluru)