October 29, 2010 at 12:53 pm #2484
Another refiner sought for Yorktown
Highest and best use, and a lot quicker
By Amanda Kerr
Modified: Friday, October 29, 2010
Originally Published: Wednesday, October 27, 2010 8:29 AM EDT
YORK – Heavy hitters are ramping up to get Western Refining to sell the Yorktown refinery and keep it going.
A meeting this month engaged Rep. Rob Wittman, Del. Brenda Pogge, Sen. John Miller, Del. Harvey Morgan, Virginia Secretary of Commerce & Trade Jim Cheng, York supervisors chairman Don Wiggins and county administrator James McReynolds in talks with the refinery manager and a union rep.
The consensus was to keep it a refinery. Jim Noel of York’s Office of Economic Development said in an interview Tuesday that Cheng agreed to get Gov. Bob McDonnell to contact Western and pitch to prospects.
Western has said it is closing the refinery due to poor profit margins.
“Based on the information we could glean, it really could be operated profitably,” Noel said. “The refinery itself, in terms of its actual processing abilities, can be operated profitably.”
The Yorktown refinery was hurt in part because it’s easier to import cheaply refined oil from other countries. Noel said a tariff on foreign oil that fails to meet certain U.S. safety and environmental standards would help.
Offshore drilling in Virginia would help attract a buyer, but those plans stalled after the oil spill in the Gulf.
The Obama administration recently lifted its ban on deep offshore drilling, but that will take years to develop. McDonnell has consistently supported offshore drilling in Virginia’s waters.
“The consensus was that if we had approved offshore drilling it could have changed Western’s mind,” Noel said. “They would have had direct access to crude oil right here.”
Dominion Virginia Power is said to be considering the refinery acreage as a relatively easy way to expand its energy footprint in the region. Noel dismissed that because there is no “synergy”?between oil refining and electricity.
Western has indicated that if profit margins were to improve, it would consider reopening. That may require oil rising to $150 or more a barrel. It’s around $82 today.
The closure will cost the county $2 million in tax revenue in the next budget and ultimately $4 million annually thereafter.
Noel said the longer the refinery remains closed the more difficult it will be to reopen. One challenge will be finding skilled workers as laid-off refinery employees move on. Another issue is the high cost associated with returning machinery to working order.
“This workforce has a very specialized, technically oriented skill set,”?he said. “You can’t pull just anyone off the street.”
October 29, 2010 at 12:54 pm #5438
Here is update on Western’s effort to sell Yorktown & growing understanding from local’s at magnitude of loss tax revenue (+$4MM /yr) which often lead even hostile residents & politicians to make concessions towards survival of the plants from all but environmental liberal wingnuts.
Doesn’t seem to be any new offers or potential canidates – and given range margins/crude required for profitability it is unlikely to reopen in near term.
December 1, 2011 at 6:10 pm #4822
Western Refining selling Yorktown refinery
Sale is expected to close by year’s end
By Amanda Kerr, email@example.com | (757) 345-2345
4:43 p.m. EST, December 1, 2011
Yorktown Refinery (Joe Fudge, Daily Press / March 23, 2007)
YORK Western Refining, parent company of the Yorktown Refinery, announced Thursday that it has entered into an agreement with a Texas-based company for the sale of the Yorktown refinery.
The $220 million sale to Plains Marketing and Plains Pipeline, subsidiaries of Plains All American Pipeline based in Houston, Texas, will include both the terminal and idle refinery at Yorktown as well as an 82-mile segment of a 424-mile crude oil pipeline Western owns in New Mexico. The sale is expected to close before the end of the year.
Western, based in El Paso, Texas, purchased the Yorktown Refinery in 2007 when it merged with Giant Industries. BP sold the refinery to Giant in 2002. The refinery was built in 1956 by Amoco.
Last year Western ceased refining operations at Yorktown and laid off around 230 employees. Operation of a terminal at the refinery, which included a storage facility, pipeline access, docks for barges and a loading area for trucks, was continued. The plan had been to use the terminal for transport of products from other suppliers, but as of last summer the terminal was only transporting Western’s products.
This summer Western connected the terminal to the Colonial Pipeline, which runs from Texas to New Jersey, to directly pipe oil products from the Gulf Coast. The connection to the Colonial Pipeline could have been an attractive addition for buyers considering purchasing the Yorktown terminal.
Gary Hanson, spokesman for Western, said he couldn’t speculate on whether the Colonial Pipeline connection was beneficial in attracting a buyer, but that the connection was an improvement in terms of Western’s operation of the terminal.
The decision to sell the Yorktown facility was largely a financial one for Western. Hanson said one of Western’s primary goals has been to reduce its debt. Third quarter results released by Western stated the company had a net debt of $659.8 million.
Plains All American, in a press release, stated that it planned to “enhance connectivity and performance” of the terminal with modifications to the facility. The terminal will have multiple transportation alternatives and store crude oil, refined products, propane, butane, ethanol and other bio-diesel fuels.
It doesn’t seem likely that the refinery will be reopened. Harry Pefanis, president of Plains All American, explained in a conference call to investors Thursday that the company plans to disassemble and sell the idle refinery equipment. Plains All American will share 50% of any proceeds from the sale of equipment with Western.
There are currently 30 employees working at the terminal and the refinery, where some are in the last stages of shutting down and cleaning equipment. Hanson said he was unsure whether there might be any immediate impact to employees at the terminal in terms of job elimination. Executives with Plains All American did not return calls for additional comment.
December 30, 2011 at 12:29 pm #4781
Yorktown refinery sale completed
New company has no plans to reopen refinery
By Amanda Kerr, firstname.lastname@example.org | (757) 345-2345
5:02 p.m. EST, December 29, 2011
YORK Western Refining announced Thursday that it has closed on the sale of the Yorktown terminal and refinery as well as a segment of an oil pipeline in New Mexico to subsidiaries of Plains All American Pipeline for approximately $220 million.
Western closed the Yorktown refinery last year but kept a transportation terminal for oil products open. This year Western completed a project to connect to the Colonial Pipeline, which runs from Texas to New Jersey and pumps oil product from the Gulf Coast.
Earlier this month, a spokesman for Plains All American Pipeline said the company had no plans to reopen the refinery. Instead Harry Pefanis, president of Plains All American, said in a conference call to investors the idle refinery equipment will be disassembled and sold. The new owner said in a press release it plans to make modifications to the terminal to improve “connectivity and performance.”
December 30, 2011 at 12:38 pm #4780
Here is update on the Western sale of Yorktown Anode Coking refinery to All America P/L Co for $220 Million ($3140/BPD or ~20% replacement value). It looks like both the 70 MBD Refinery & 17 MBD coker are history. If plant is disassembled the coker could have life as Frankenstien-coker in Inida or elsewhere (similar to Shell’s NL coker in Argentina, Paramount’s coker in Wyoming, or Germany’s coker in India). This was Virginia’s ONLY refinery so -it disappears from the OGJ WW Refinery Survey this years 2012 tables & VA joins the other 39 states with little or no refining capacity.
The Yorktown Coker has been on list for lost anode coke production as either conversion to fuel or shutdown. The 55 year old (1956) BP Amoco Refinery/Coker is fairly young by US standards but Amoco put little capital investment in its refining assets. However the period between Giant $170 million purchase from BP (who had acquired from Amoco merger) in 2002 & $1.4 Billion Western-Giant merger in 2007 saw a potential for an expansion and coker upgrade but the debt load was more than Western could handle and had to go up for sale.
The Yorktown anode producer joins long list of lost worldwide calcinable coke suppliers from conversion or closure in the 2006-2011 coker cycle. The Hartford coker, Whiting coker, Chalmette (not permanent s/d yet), BP Toledo fuel conversion and few of US examples. Canadian Crude/Refinery & Coker expansions/Sales-closure are expected for COP Alliance, Husky Lima, MAP Robinson, HollyFrontier Tulsa and others are only awaiting end of Cushing Crude Glut/Arrival Canada PL Bitumen crude and minor debottlenecking or completed sales.
China also has lot of anode producers who are/have converted to fuel as imported heavy crude displaces domestic sweet crude. about 1/3 of my expected 32 lost calcinable/anode producers are China Anode cokers – but like US current/short term demand/crude pricing effects leave them as partial producers. And there are some who find that Fuel for China just means new anode blend source for Western calciners (but high freight cost and close differential to China imported fuel cost make it moot point lot cases).
The only bright spot comes from Argentina & Brazil coker addition/expansions but Aluminum producers are going need radically adjust merchant calciner coke spec’s. I think it is doubtful that all the MidEast calciners are going to find enough Kuwait & Saudi new petcoke production to fill thier calciners since new coking projects currently cutting capital investment cost still need costly resid desulfurizers to make Kuwait desulfurized resid anode blend coke quality.
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