23 April 2012 16:34 [Source: ICIS news]
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HOUSTON (ICIS)--US Sunoco has extended the deadline for shutting down its 330,000 bbl/day Philadelphia refinery in Pennsylvania to August, as a result of its ongoing discussions with The Carlyle Group, the company said on Monday.
Sunoco had previously set a deadline of July of this year to shut down the facility if no buyers were found.
The company has already shut down its 178,000 bbl/day Marcus Hook refinery, also in Pennsylvania.
In February, Sunoco said it did not believe the Marcus Hook facility would be sold and restarted.
Sunoco would like to sell both refineries as part of its transition to a fuel logistics and retail business.
The company said on Monday that it had started discussions with The Carlyle Group for a possible joint venture involving the Philadelphia refinery.
If the deal is completed, Sunoco would contribute the assets of the Philadelphia refinery in exchange for a non-operating minority interest in the joint venture.
In addition, Sunoco would have no on-going capital obligations with respect to the refinery, the company said.
“Carlyle would contribute cash to the joint venture, hold the majority interest and oversee day-to-day operations of the joint venture and the facility,” Sunoco said.
No other financial terms of the deal were disclosed.
Sunoco chief executive Brian MacDonald said The Carlyle Group has a track record of successful business turnarounds.
“The Carlyle Group has financial depth, broad energy sector experience, and a history of building value,” he said. “Also, a concerted effort by all stakeholders is necessary to ensure the successful completion of this joint venture. We have been encouraged by the offers of support by federal, state, local and labor officials.”
Rodney Cohen, the managing director of The Carlyle Group, said that Carlyle was working with Sunoco and other stakeholders to find a way to keep the refinery running.
“The facility has been operating at a significant loss for some time, and we are exploring every avenue to create a viable plan,” he said. “It is a heavy lift and we are not sure a solution is possible, but we are doing the work.”
United Steel Workers union spokeswoman Lynne Hancock said the possible deal with Carlyle would be a win-win for everyone involved.
“It sounds like a good idea because it’ll give the community its jobs back,” she said. “And it will provide the product necessary to supply the northeast market, which would lessen the impact of the high cost of gasoline.”
Additional reporting by Brian Ford
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