Tuesday, July 28, 2015

State offers oil co. $30 million to re-open shut refinery

PBF Energy Partners agrees to restart the Delaware City Valero plant and hire 600

State offers oil co. $30 million to re-open shut refinery

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"Five months after the Valero Corporation announced it was permanently shutting down the Delaware City Refinery, PBF Energy Partners, LP has entered into an agreement with Valero to acquire the refinery and restart refining operations as early as spring 2011," Delaware Gov. Jack Markell said in a statement. Markell says he "negotiated with PBF to bring 600 full-time jobs to Delaware, in exchange for certain economic development incentives, should PBF acquire and operate the refinery." Inquirer story here. PBF will pay Valero $220 million for the plant, says Valero here.

What will Delaware give PBF? A "strategic fund loan of $20 million in FY 2011, which would convert to a grant if PBFl," among other conditions, "supports at least 600 full-time jobs per year in five consecutive calendar years each year after refining operations are initially restarted"; plus, "a one-time appropriation of $10 million that must be used for [nitrogen oxide] control projects at the refinery"; and "tax-exempt facility bonds and recovery zone facility bonds in order to assist PBF to finance the construction and installation of a gas/oil hydrotreater, which will reduce NOx emissions by about 300 tons per year and enable the refinery to produce extremely low sulfur fuels." Talks continue.

Reuters: "PBF Investments, a $2 billion investment fund led by refining legend Tom O'Malley, has agreed to buy Valero Energy Corp's shuttered Delaware City, Delaware, refinery, for $220 million, Valero said on Thursday.

"The widely anticipated sale brings O'Malley back to U.S. refining, which he left in 2005 to run European refining company Petroplus. O'Malley and Petroplus, along with equity firms Blackstone Group and First Reserve Corp, created PBF to buy U.S. refineries...

"PBF said it plans to restart the refinery in the spring of 2011 after nine months of major maintenance... O'Malley has said he plans to bid on Valero's 185,000-bpd Paulsboro, New Jersey, which the company is also considering selling."

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PhillyDeals posts drafts, transcripts and updates of Joseph N. DiStefano's columns and stories about Philly-area business, which he's been writing since 1989.

DiStefano studied economics, history and a little engineering at Penn and taught writing at St. Joseph's. He has written thousands of columns and articles for the Inquirer, Bloomberg and other media, wrote the book Comcasted, and raised six children with his wife, who is a saint.

Reach Joseph N. at JoeD@phillynews.com, distefano251@gmail.com, 215.854.5194 or 302.652.2004.

Reach Joseph N. at JoeD@phillynews.com or 215 854 5194.

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