Philadelphia refinery to shut down

Philadelphia Energy Solutions plans to shutter its combined 335,000-b/d refining complex in Philadelphia following a massive explosion and ensuring fire that broke out early June 21 at the site.

Jun 26th, 2019

Philadelphia Energy Solutions LLC (PES) plans to shutter its combined 335,000-b/d refining complex in Philadelphia following a massive explosion and ensuring fire that broke out early June 21 at the site (OGJ Online, June 21, 2019).

The refinery will formally shut down within the next month, Philadelphia Mayor Jim Kenney said on June 26.

“We will immediately convene a group of City and quasi-governmental organizations to discuss the economic and employment impacts, and what the City is able to do in response,” Kenney added.

Additionally, Kenney said his department also is retooling plans of the working group led by the city’s managing director and fire commissioner to focus efforts on determining the future of the refinery, assisting PES to transition the site safely, communicating with local residents, and supporting the employees impacted by PES’s decision.

"Should [PES] pursue a permanent shutdown of the plant, increased imports of clean products into the region will be necessary to meet demand,” said Marc Amons, Wood Mackenzie’s senior research analyst for North America refining, following the mayor’s announcement.

"With 335,000-b/d of crude processing capacity, the Philadelphia refinery is a major supplier of gasoline and diesel into US East Coast markets, yielding approximately 125,000 b/d of gasoline and 110,000 b/d of diesel,” Amons noted.

"The US Gulf Coast will remain a key supplier of refined products with supplemental gasoline imports from Europe likely needed to replenish lost production from the facility. Retail gasoline prices in the Northeast region of the US will become increasingly dependent on import economics from Europe and have potential to experience a sustained increase, with the remaining east coast refiners well-positioned to capitalize on stronger gasoline cracks," Amons said.

Details regarding the permanent future of the refinery, including PES’s plans for the site, remain unavailable.

PES has yet to respond to inquiries from OGJ regarding the June 21 blast that injured five refinery workers and prompted a temporary shelter-in-place for residents in the surrounding area (OGJ Online, June 24, 2019).

Contact Robert Brelsford at rbrelsford@endeavorb2b.com.

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