Phillips 66 lists Alliance refinery in Louisiana
- US refiner talks to potential buyer – sources
- Sale of 50-year-old refinery reflects changing fuel market
HOUSTON, Aug.24 (Reuters) – U.S. fourth refiner Phillips 66 (PSX.N) said on Tuesday it had put up for sale the smaller of its two Louisiana refineries amid persistent losses and an uncertain future for fuels .
The company is in talks with a potential buyer on the sale of its 255,600 bpd (bpd) Alliance refinery in Belle Chasse, Louisiana, according to two people familiar with the matter. The identity of the potential buyer could not be immediately known.
U.S. refiners have closed or sold petroleum processing plants as the COVID-19 pandemic has reduced demand for gasoline and jet fuel, causing losses for the industry.
Major automakers are accelerating their transition to electric vehicles, signaling tougher times ahead.
“The refining business in the United States going forward will be smaller, not bigger,” Managing Director Greg Garland said earlier this month while outlining Phillips 66’s plans to expand its fuel offering. and low carbon components for electric car batteries.
Garland predicted that gasoline demand in the United States and Europe was at or near peak. The Houston-based refiner posted second-quarter profit on strong demand for chemicals, but work-from-home policies and sagging fuel margins left its refining business in the red.
Phillips’ 66 lawsuit for a buyer for the Louisiana plant continues an industry rationalization of excess capacity, said Garfield Miller, CEO of investment bank Aegis Energy Advisors.
Falling demand amid the pandemic forced the shutdown of five U.S. refineries and reduced oil processing capacity by 4.5% to 18.13 million barrels per day (bpd), according to US Energy Information Administration. Read more
The 50-year-old Alliance refinery is located 20 miles south of New Orleans along the Mississippi River where ships deliver crude oil and recover fuel.
“We expect the commercialization process to continue over the next few months,” Phillips 66 spokesperson Bernardo Fallas said. “We will make an announcement at the appropriate time if and when an agreement has been reached with a buyer.”
The refinery market became active this year with Royal Dutch Shell (RDSa.L) agreeing to sell its majority stake in a Texas refinery to Petroleos Mexicanos [RIC:RIC:PEMX.UL] and a Washington State refinery at HollyFrontier (HFC.N).
HollyFrontier has agreed to pay $ 350 million for Shell’s 145,000 b / d capacity refinery in Anacortes, Wash., As well as an additional amount for inventory on hand when the sale closes later this year. HollyFrontier estimated the inventory would cost between $ 150 million and $ 180 million.
The price paid for the Anacortes refinery is consistent with what was paid before the COVID-19 pandemic, which hit fuel demand hard in 2020, and would put the value of a refinery at around $ 2,400 per barrel .
Reporting by Erwin Seba; Editing by Chris Reese and Karishma Singh
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