28 February 2012 23:52 [Source: ICIS news]
HOUSTON (ICIS)--US-based Sunoco set aside $243m (€182m) in the second half of 2011, which would help pay for terminating its polymer-grade propylene (PGP) supply contract with Braskem, Sunoco said on Tuesday.
That plant, in Marcus Hook, Pennsylvania, was part of a $350m sale that also included Sunoco's PP plants in La Porte, Texas, and Neal, West Virginia.
The Marcus Hook PP plant received a significant portion of its feedstock from Sunoco, which owns refineries in Marcus Hook and Philadelphia, Pennsylvania.
However, in September 2011, Sunoco said that it would try to sell the two refineries, part of a plan to exit the refining business.
In December, Sunoco said it was permanently shutting down the main processing units of the Marcus Hook refinery.
Sunoco said it has found no proposals to buy the Marcus Hook facility as a refinery. It is now talking with other groups for other uses for the plant.
Meanwhile, Sunoco has found some interest for the Philadelphia refinery, the company said. However, if it cannot complete a sale, Sunoco said it would shut down the main processing units at the Philadelphia refinery by July 2012.
In connection with these plans, Sunoco recorded provisions of $243m in the second half of 2011, the company said in a regulatory filing. The provisions are for severance, contract terminations and idling expenses.
These include the cost of Sunoco terminating its 10-year supply contract with Braskem, the company said.
PP sources said the shutdown of the Marcus Hook refinery created a "significant challenge" for Braskem.
Sunoco did not immediately return a request for comment late on Friday.
($1 = €0.75)
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