June 1, 2010 at 11:57 am #2650
Petroplus bullish on Delaware City refinery
Published: Wednesday, May 5, 2010 9:21 AM CDT
Petroplus Holdings remains bullish on the expected purchase of the Delaware City refinery, citing widening margins for heavy crude oil that it would run through the complex.
A partnership that includes Petroplus plans to spend $220 to purchase the refinery, with another $150 million to get it back into operation and meet clean air standards. The State of Delaware has developed a financial assistance package that carries incentives if employment reaches 600.
The half-century-old refinery was closed earlier this year by Valero, which cited major losses in its decision. Valero was making plans to demolish the refinery when Gov. Jack Markell asked that any such effort be delayed while a buyer was sought.
Petroplus, in accordance with the International Financial Reporting, reported a net loss from continuing operations of $ 26.4 million, for the first quarter, compared to net income from continuing operations of $3.6 million or $0.05 per share, for the three months ended March 31, 2009.
Commenting on the Swiss-based companys growth strategy, Jean-Paul Vettier, Petropluss Chief Executive Officer, stated, We are very excited with our investment in the Delaware City refinery via PBF Energy Partners, L.P. This investment provides an excellent opportunity for us to upgrade our refinery portfolio and enhance our geographic diversity as we enter the U.S. market.
Vettier says no additional refinery acquisition is on the immediate horizon in Europe and one refinery in France is under study to determine if it can be sold or become profitable.
Regarding the refining market, Thomas D. OMalley, chairman, commented: We have also seen the light-heavy differential widen over the last few months. The Delaware City refinery is well-positioned to capitalize on the widening of the light-heavy differential as it is a highly complex refinery. We believe the trend to better margins that we saw in the first quarter will continue as the world economy recovers from the deep recession. Operating problems and an end to lower prices for heavy crude led to the Delaware City refinery running at an estimated loss of $1 million a day, according to Valero, which is planning to sell the site to Petroplus.
OMalley, as CEO of Premcor, sold the refinery to Valero. He said in an announcement of the deal to purchase Delaware City that expertise from former Premcor staffers will be used in the reopening of the refinery.
OMalley stated further, 2009 was the perfect storm which negatively affected the worlds refining industry. Storms dont last forever and it seems to have passed. We believe better days are ahead.
The company also launched today an offering of 8.65 million newly issued registered shares on a non-preemptive basis. The company intends to use approximately $125 million of the net proceeds of the offering to invest in PBF Energy Partners, L.P. to fund the acquisition of the Delaware City refinery and to use the balance to fund further investments in PBF Energy Partners, L.P. related to this or other acquisitions.
Petroplus Holdings AG is the largest independent refiner and wholesaler of petroleum products in Europe.
June 1, 2010 at 11:58 am #5585
Hope Petroplus is smart enough to recognize that they HAVE to replace the major problem Delaware = Fluid coker cause its been crashed too many times to ever be “fixed”.
Looks like they have war chest to spend $150MM to get it in compliance & Gov. supporting their efforts…..be nice time for do replacement with Delayed Coker Technology for the plant.
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