June 16, 2010 at 5:03 pm #2621
Refiner Sunoco to spin off its coke business
AP – 6/16/2010 (6 hours ago)
PHILADELPHIA – Petroleum refiner Sunoco said Wednesday that it plans to spin off its metallurgical coke manufacturing operations as part of a plan to boost the value of its shares.
It also said it expects its refining business to report a profit for the quarter for the first time since the first quarter of 2009.
Its shares rose $1.58, or 4.8 percent, to $33.82 in morning trading Wednesday.
Sunoco said SunCoke Energy will be split from the company in the first half of 2011. Coke is a key ingredient used to make steel. The company provides coke for steel manufactures in the U.S. and Brazil.
“The fuels and coke units are distinct businesses with different business models, different sets of customers and no significant integration or synergies,” Lynn Elsenhans, Sunoco’s chairman and CEO, said in a statement.
Elsenhans said spinning off SunCoke Energy will provide SunCoke independent access to capital markets to finance its growth. SunCoke Energy has operations in Virginia, Indiana, Ohio and Illinois. It also is building a plant in Middletown, Ohio, that is slated to produce 550,000 tons of coke and 46 megawatts of electricity when fully operational in the second half of 2011. It also operates and has a stake in a 1.7 million tons-per-year coke-making operation in Vitoria, Brazil.
Elsenhans credited steps the company has taken and slight improvement in market conditions for the turnaround in the company’s refining operations.
Refineries that turn oil into gasoline, diesel and other fuels have struggled financially as crude prices rebounded last year on bets by investors that a recovering economy will mean more demand for fuel. But consumption has remained weak and that has kept refiners from being able to fully pass along the higher costs of crude to customers.
June 16, 2010 at 5:48 pm #5573
Here is article on Sunoco spinning off its Met Coke buisness (see story link @ http://www.google.com/hostednews/ap/article/ALeqM5hYxI92b5ocz0eAOcX4E53LAjddUwD9GCD6T01 ).
They are of course mainly talking about coke (Met Coke) made from coal (Metallurgical Coal)
and not petroleum coke. But I think lot of the previous Sunoco Tulsa Coking Refinery low sulfur petcoke used to make it into some of Suncoke Energy markets.
The sale of both Sinclair & Sunoco Tulsa Refineries to Holly who plans to merge the two plants will likely result in some crude slate changes to the sweet crude refineries and higher sulfur on petcoke. (Sincliar expansion & coker project was cancled prior to June 2009 purchase & new coke drums remained Sincliar property at Port Catoosa.)
This is example of firm slowly tearing itself apart (refineries, chemicals, metcoke, wonder what is next. They seem to be following Dupont’s example (sold Consol coal, Chemical Group, COP Oil & Fibers Group) who went from Fortune 500 #8 slot when merged with Conoco (also tied #8 at time) down to current rank below #97.
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