Delta Air Lines’ Refinery Near Restart

 

Delta Air Lines' Refinery Near Restart

Delta Air Lines’ Refinery Near Restart

A crude distillation unit at the 185,000 barrel-per-day refinery of Delta Air Lines’ Monroe Energy unit in Trainer, Pennsylvania, is heating up and on circulation in preparation for restart, a source familiar with the situation said on Tuesday.

The sulphur recovery unit is also ready for restart, but unforeseen issues with the fluid catalytic cracking unit will delay the restart of that unit for at least a week and maybe longer, the source said.

Delta bought the refinery last spring from Phillips 66 to control fuel costs. ConocoPhillips shut the plant at the end of September 2011 as it sought to minimise exposure to high-cost, low-margin East Coast refinery operations.

Although the plant was preserved at shutdown to be able to be restarted with a minimum of damage to piping and units, problems with the fluid catalytic cracking unit were found during a major turnaround on the unit that began in early July.

Delta expected to spend about USD$100 million to increase jet fuel production at the refinery to 52,000 bpd, or about 32 percent of output, while reducing production of gasoline.

Monroe signed a three-year deal with BP to supply crude oil to the facility. Under a product-offtake deal, Monroe will exchange gasoline and other refined products from Trainer for jet fuel from Phillips 66 and BP elsewhere in the country through multi-year agreements.

Delta is the first US airline to buy an oil refinery, aiming to manage growing fuel costs. The airline expects the refinery to reduce its annual fuel bill, which reached USD$12 billion last year, by USD$300 million.

Delta President Ed Bastian told a Deutsche Bank conference earlier this month that Delta could save even more as the carrier was looking to bring in Bakken crude from North Dakota to supply the refinery at prices that could be equivalent to West Texas Intermediate or lower.

The refinery currently processes more expensive crude from the North Sea and Africa.

(Reuters)



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