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Axeon Plans to Shutter New Jersey Asphalt Refinery

Reuters, January 19, 2017
Reuters

Axeon Specialty Products plans on shutting down its 75,000 barrel-per-day asphalt refinery in Paulsboro, New Jersey as early as this summer, according to a local politician and sources familiar with the company's plans. If completed, the shutdown marks another contraction in the shrinking refining sector along the U.S. northeast, where four of the region's 10 refineries have shut in the past decade. Axeon is owned by New York-based hedge fund Lindsay Goldberg. Neither Axeon nor Lindsay Goldberg responded to requests for comment.

"We are working hard to see if we can't find a way to save the plant and the jobs," said New Jersey assemblyman John Burzichelli, who represents the refinery town and said that he has talked with company officials to explore how to save the plant.

The plant employs around 100 workers, including union labor represented by the United Steelworkers. Axeon has already agreed to sell the refinery's storage facilities and marketing business to Virginia-based Associated Asphalt, three sources told Reuters. Associated Asphalt did not respond to requests for comment.

The Paulsboro refinery complex has a storage terminal with 4.1 million barrels of capacity, three marine docks and a rail offloading facility, according to the company's website. Axeon cannot sell the refinery without federal approval, which could take up to six months, sources said. The refinery was a steady buyer of Venezuelan and Canadian heavy crude, according to the U.S. Energy Information Administration. Previously part of Venezuelan-owned CITGO Asphalt Refining Company, the company was acquired by NuStar Energy LP in 2008 before NuStar sold half its business to Lindsay Goldberg. Lindsay Goldberg purchased the company outright in February 2014, naming it Axeon Specialty Products. The company had discussed expanding the plant, but scrapped the idea as the oil downturn hurt refinery profits in the past 15 months.

Axeon sold nearly all of its assets in 2015, including terminals in Georgia, Virginia and Delaware, but not the New Jersey refinery and its marketing book.

 

(Reporting by Jarrett Renshaw; Editing by Simon Webb and Lisa Shumaker)

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