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The oil giant and the asset manager have joined forces to form Philadelphia Energy Solutions, which will allow the refinery to continue to process 330,000 barrels of oil per day into various refined products. It was scheduled to be shut down in August.
According to a Sunoco news release, the joint venture is expected to save 850 jobs, create more than 100 new jobs, and continue the daily flow of 10 million gallons of various fuels.
"This partnership is a great example of what can happen when motivated people think creatively to solve pressing problems. The private sector, government and labor all played important roles in getting this done, said Brian P. MacDonald, Sunoco's CEO. "This is the best possible outcome for everyone involved: existing jobs will be saved, new jobs will be created and new business opportunities will be given the chance to develop."
Capital for the refinery investment will come from the Carlyle Equity Opportunity Fund and the Carlyle Energy Mezzanine Opportunities Fund. Sunoco will contribute its Philadelphia refinery assets to the joint venture in exchange for a non-operating minority interest.
"Together we've re-imagined the Philadelphia refinery and its role as a critical energy hub in the Northeast," said Carlyle Managing Director Rodney Cohen. "This joint venture will keep one of the region's most important economic engines up and running. The refinery will be a reliable and critical supplier of fuels to the regional market through its new business structure and improved crude oil sourcing. In addition, the refinery's exceptional location and infrastructure will enable the joint venture to create new business opportunities related to Marcellus Shale natural gas fields. We also look forward to continuing to work with all of the relevant stakeholders -- government officials, the community, environmental officials and organized labor -- as we work to stabilize, strengthen and expand the refinery."
As CSNews Online has reported several times in the past, former Sunoco CEO Lynn Elsenhans and MacDonald have confirmed the company wanted to exit the refinery business. This transaction effectively completes that process.
Sunoco is expected to be officially acquired by Energy Transfer Partners later this year.