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Philadelphia Refinery to Sell Oil Stocks and Equipment Following Massive Fire

Reuters, July 8, 2019
Reuters

The Philadelphia refinery ravaged by a massive fire two weeks ago has begun offering to sell off its stocks of oil and some equipment, according to four people familiar with the matter, after the refinery’s owner announced it would seek to permanently shut it. Philadelphia Energy Solutions Inc has said it will close the 200,000 barrels-per-day (bpd) Girard Point section of the 330,000-bpd complex, the largest and oldest on the U.S. East Coast, after a fire extensively damaged the facility. The plant employed more than 1,000 workers and was a major source of gasoline in the most densely populated corridor of the United States.

The business has struggled financially since emerging from bankruptcy last year. The asset sell-off started this week and triggered worries among workers that the company no longer aimed to find a buyer willing to restart the plant, as it had promised after the fire. The sale proposals included offers for future crude cargoes and time-chartered Jones Act vessels, two of the people familiar with the matter said.

“PES is continuing its efforts to secure the facility in anticipation of potentially rebuilding the damaged infrastructure, and preparing for a possible sale and restart,” PES said.

PES declined to comment on the asset offers. Workers this week began draining crude from some of the refinery’s processing units as well as fuel and any corrosive liquids, one refinery employee said. PES has offered at least one cargo of Chadian Doba Blend, a heavy, sweet crude from the north-central African nation, four trade sources said.

The company owns or leases a fleet of railroad tank cars. Its fleet encompasses about 10 sets of unit trains consisting of dozens of DOT-117 tank cars, a fairly new and in-demand type in the rail industry, one person said. It was unclear whether PES has begun offering the cars or leases to potential buyers.

While the company was offering to sell some assets, it did not appear to be the start of a liquidation, one of the people said. PES on Wednesday reversed plans to shut the undamaged Point Breeze section of the complex this week and will continue operating it at a reduced level for at least another month, two people familiar with the plant’s operations told Reuters.

The larger, Girard Point section of the refinery complex has been shut since the fire on June 21 destroyed an alkylation unit, which produces high-octane components that go into premium gasoline and chemicals.

(Reporting by Devika Krishna Kumar, Stephanie Kelly, Jarrett Renshaw and Laila Kearney; Editing by Susan Thomas and Rosalba O'Brien)

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Copyright 2019 Thomson Reuters. Click for restrictions.

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