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Sonoco Tulsa Refinery may become terminal

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This topic contains 1 reply, has 1 voice, and was last updated by  Charles Randall 13 years, 8 months ago.

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  • #3231

    Charles Randall
    Participant

    Refinery may become terminal
    Although Sunoco would prefer to sell, the market is tough.
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    <Note picture didnt make it =see link@btm>
    The Sunoco Inc. refinery sprawls along the west bank of the Arkansas River across from downtown Tulsa. TOM GILBERT/Tulsa World file 

    By ROD WALTON World Staff Writer
    Published: 1/13/2009  2:21 AM
    Last Modified: 1/13/2009  4:14 AM

    .leadp { font-size:14px; color:#626466; }

     
    Sunoco Inc.’s west Tulsa refinery could sell for $500 million, but market conditions and environmental challenges might force the company to convert it into a terminal by the end of this year.

    Sunoco is still looking for a buyer and has talked to a number of interested parties since December 2007, the Philadelphia company’s spokesman Thomas Golembeski said.

    Sunoco executives believe that some change is in store by next December.

    “We would like to sell the refinery, but in the meantime we’re going to look at alternative operating arrangements,” Golembeski said in a telephone interview. “We would prefer to sell the facility.”
     
    The refinery can produce about 85,000 barrels per day, reports say. Falling gasoline prices forced the company last year to cancel a $375 million project to upgrade the quality of the diesel fuel it produces.

    Sunoco also faces the same economic challenges that so far have prevented Valero Energy Corp. of San Antonio from selling two Mid-Continent refineries that it put on the market, reports show.

    A J.P. Morgan analyst, Michael LaMotte, wrote in a report last month, “We expect SUN (Sunoco’s ticker symbol) to have difficulty divesting of the asset.”

    Sunoco “does not believe the investments required to make the refinery compliant and competitive make economic sense,” he added. “In our view, any potential buyer would be faced with the same issues. We believe the terminal conversion is the most likely outcome.”

    In 2005, Sunoco signed off on a federal consent decree committing it to spend $28 million on emissions reduction at the refinery, according to reports. Stricter EPA sulfur limits also have forced the company to spend hundreds of millions of dollars at various refineries.

    The refinery employs about 375 people and primarily produces diesel fuel and lubricants, reports show. The refinery was acquired 41 years ago by Sunray DX, which later merged with Sun Oil Co., a forerunner of Sunoco Inc.
     
     (Source: web @ http://www.tulsaworld.com/business/article.aspx?subjectid=49&articleid=20090113_49_E1_TheSun512072 )
     

     
     
     

  • #6343

    Charles Randall
    Participant

    Here is update on Sunoco Tulsa Refinery – they seem to have backed themselves into a corner… or in this case a terminal since No upgrade or coker ~ =no refinery.
     
    Since they canceled the $375 MM upgrade that would also have made them compliant with environmental & product quality compliance, they are now forced to either sell or become a terminal. 
     
    The article mentions Valero has 2 Mid-Continent refineries that haven’t sold do to economic reasons – it is doubtful that currently configured sweet crude Tulsa refinery would be considered ahead of them. Looking at all Valero’s refineries for sale & current Western’s refinery sale wish list makes it an even darker horse/candidate.
     
    Regards

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