Billionaire considers a bid for Sunoco refinery

The owner of a Western Pennsylvania refinery says he is considering bidding on Sunoco's giant Philadelphia refinery.

John A. Catsimatidis, chairman and chief executive of United Refining Energy Corp., said his company will decide this month whether to make an offer for the refinery, which Sunoco Inc. has promised to shut down on July 1 if it can't find a buyer.

"We have interest in it," Catsimatidis said in a telephone interview on Thursday. "We're looking at it. But that's all there is to it."

Catsimatidis is the first potential buyer to publicly acknowledge an interest in the 335,000 barrel-a-day refinery, the largest on the east coast and one of three in the Philadelphia area that are threatened with permanent closure because their owners say they are unprofitable.

C. Alan Walker, Pennsylvania's secretary of community and economic development, on Thursday told the House Appropriations Committee that he believed that two of the three refineries will find buyers.

"I am confident that there is a high likelihood that we will be able to save two of the three refineries," Walker said, prompting the committee chairman, Rep. William Adolph (R., Delaware County), to ask him to repeat himself.

In addition to the Philadelphia refinery, Sunoco has already shut down operations at its Marcus Hook refinery. And, ConocoPhillips has shut down operations at its refinery in Trainer.

Catsimatidis initially stated his interest in the Philadelphia refinery Thursday to Bloomberg News.

His company in 1986 bought United Refinery Co., which operates a 70,000 barrel-per-day refinery on the Allegheny River in Warren, Pa. The plant processes Canadian crude oil delivered by pipeline.

The company also operates 366 Kwik Fill, Red Apple and Country Fair retail gasoline and convenience stores in western New York and Western Pennsylvania.

Catsimatidis, a billionaire whose holdings include the Gristede's Foods grocery chain in New York City, owns all the voting shares of United Refining. The company reported revenue of $3.2 billion last year and a net loss of $8.1 million.

Sunoco, whose refineries lost $1 billion in the last three years, announced plans in September to exit refining to concentrate solely on retail marketing and logistics. It says it has received no interest from potential buyers to run the Marcus Hook property as a refinery.

The Philadelphia Refinery covers an area of about 1,400 acres - 2.2 square miles - and employs about 850 workers.

The U.S. Energy Department on Monday said fuel markets in the Northeast "could be significantly impacted" if the Philadelphia refinery shuts down, leading to to tight supplies and price spikes in some areas.

The report from the U.S. Energy Information Administration said supplies of ultralow sulfur diesel in Western Pennsylvania and New York State would be most adversely affected. Those areas happen to be in the heart of United Refining's market.