Workers, officials, politicians celebrate reopening of Del. refinery

DELAWARE CITY, Del. - Wall Street came to the oil refinery here Friday to celebrate with workers and elected officials the reopening of a facility that once was losing $1 million a day.

Backed by private-equity firms Blackstone Group L.P. and First Reserve Corp., PBF Holding Co. L.L.C. bought the 190,000 barrel-per-day refinery for $220 million in June 2010.

They spent more than a year and an additional $450 million bringing the 5,000-acre site back into service after the previous owner, Valero Energy Co., hurriedly shut the refinery in November 2009.

Delaware Gov. Jack Markell called it an "unbelievable kick in the gut" when Valero chief executive Bill Klesse called him that month to tell him that the nation's largest oil refiner was closing the Delaware City refinery, which had been built by Getty in 1955. More than 500 Valero employees lost their jobs.

On Friday, speakers addressing lawmakers, investors, refinery workers and suppliers gathered for the event credited Markell and his economic development team for paving the way for the deal that PBF eventually struck.

PBF chairman Thomas D. O'Malley acknowledged that the restart took longer and cost far more than planned. But he emphasized that the current management and ownership see the Delaware refinery, which is capable of processing cheaper, heavier grades of crude oil, as a long-term investment.

At a time when other refineries that process light, sweet crude are closing or set to close, including three in the Philadelphia area, Markell called his state fortunate to see its refinery reopen and rehire about 500 employees and 250 contract workers.

Last month, Sunoco Inc. and ConocoPhillips put their refineries in South Philadelphia, Marcus Hook and Trainer up for sale. If no buyers are found, all three will be shut in 2012.

In a brief interview after the event, O'Malley said PBF had been approached by both Sunoco and ConocoPhillips about those sites. But buying East Coast refineries that handle more expensive, sweet crude is "not for us," he said, because PBF "can't see a way to make money" doing so.