‘Small handful’ of potential refinery buyers

Sunoco Inc. and ConocoPhillips are shopping their Delaware River refineries to a small group of potential buyers who might keep them open, saving about a thousand threatened jobs.

But elected officials and labor leaders who met Monday with representatives of the oil companies expressed frustration that they know little more about the seriousness or intentions of the buyers.

"They're precluded from telling us what may be going on at this time," U.S. Rep. Pat Meehan (R., Pa.) said after emerging from the two-hour meeting at the Marcus Hook Community Center. "That is what is discouraging. What's encouraging is that there are clearly people looking at these facilities."

It is a "small handful" of lookers, Meehan said.

The oil companies announced in September plans to sell or close their refineries in the Philadelphia area, citing deteriorating market conditions for fuel.

ConocoPhillips is shutting down its plant in Trainer by the end of the year. Sunoco announced this month that it will shut down its Marcus Hook plant immediately, and not keep its Philadelphia refinery open later than July.

Public officials have rallied support to keep the plants open and to try find a buyer. "We're all standing by to help if there's any way we can," said U.S. Sen. Pat Toomey, a Republican.

U.S. Rep. Bob Brady (D., Pa.) and labor leaders were annoyed that the oil companies sent midlevel representatives who were unable to provide much detail.

"We're not talking to the top people of Sunoco or Conoco," said Brady. "That's wrong."

Sunoco spokesman Thomas P. Golembeski, who was not present at Monday's meeting, said the company is bound by nondisclosure agreements and unable to offer many details about potential buyers. Tactically, the company also does not want to tip its hand with potential buyers.

"Selling a refinery is a complex undertaking," he said. "It takes time."

Some officials are still sore at Sunoco for its surprise announcement this month to shut down Marcus Hook now rather than waiting until July.

Golembeski said the Philadelphia company lost more than $800 million refining oil since 2009, almost a million dollars a day for three years. "To continue operating Marcus Hook potentially threatens the company," he said.

The local refineries are considered difficult to sell because whoever buys them will face the same challenges as the current owners. The plants are designed to use more expensive, low-sulfur "sweet" crude oil, which makes them unprofitable for a company like Sunoco, which buys its crude oil on the open market. Upgrading the refineries to make them more complex would require potentially billions of dollars of investment.

Industry experts say the plants might interest an oil producer that has its own sources of sweet crude.

"Our objective first and foremost is to continue keeping these refineries operating in the refining of oil," said Meehan.

But the refineries might also be converted to another industry. Sunoco Chief Executive Lynn Elsenhans has suggested that a chemical producer using Marcellus Shale natural gas as a raw material might be interested.

"We're considering all options, including alternative uses for the sites," said Golembeski.

Sunoco's pipeline affiliate, Sunoco Logistics L.L.P., might retain some fuel-tank storage and dock facilities.