03 November 2011 22:20 [Source: ICIS news]
HOUSTON (ICIS)--Sunoco is looking at ways to make its Pennsylvania refineries more attractive to potential buyers, company executives said on Thursday.
Sunoco CEO Lynn Elsenhans said during the company’s earnings conference call that it was continuing to pursue the sale of its 178,000 bbl/day Marcus Hook and 335,000 bbl/day Philadelphia refineries in Pennsylvania. The company is engaged in a formal sales process working with Credit Suisse.
The company previously announced that the refineries would be shut down in July 2012 if no sale was made. In this case, the company would liquidate its product and continue to pay some remedial fees, mainly on health and safety costs.
In addition, Elsenhans said the refinery could be shut down before July 2012 or rates could be cut if that was in the best interest of the shareholders.
Chief financial officer Brian MacDonald said the combined book value of the refineries is $400m (€292m).
A preferable option for making the refinery sale more appealing would be to run the facilities on mid-continent Bakken shale crude oil, Elsenhans said. Currently, there is no project in the works to bring mid-continent crude to the northeast, and Sunoco would not disclose if any such project was in the works.
“Obviously we are interested in running crude like Bakken to improve crude costs for refinery, and some of those [crudes] are becoming available in small amounts,” Elsenhans said. “We are always looking for those opportunities.”
The logistics for moving the Bakken crude to the northeast would be difficult. Elsenhans said there would need to be enough rail cars and places to unload them in addition to transporting the crude by truck.
“Whether people having the assets to do those things will get a return giving the kind of differentials [they want] is not a guarantee,” Elsenhans said. For instance, the Bakken crude supply may not be enough over the long term.
($1 = €0.73)
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