Yahoo Finance Exclusive: Biofuels company proposes to buy fire-damaged Philadelphia refinery
By Laila Kearney
PHILADELPHIA (Reuters) - A biofuels producer said on Thursday it is proposing to acquire the fire-damaged Philadelphia Energy Solutions refinery and convert it to make renewable diesel and jet fuels.
S.G. Preston Co is the first company to identify itself as a potential buyer of the refinery, the oldest and largest on the East Coast. PES's owners halted production at the 335,000 barrel-per-day refinery and put the 1,300-acre (526-hectare) facility up for sale after a June fire damaged one of its gasoline-producing units.
The biofuels company would convert at least a portion of the plant to make renewable diesel, marine diesel and jet fuel. Raw material for the fuels would be fats, oils and grease acquired mainly from surrounding communities, two people familiar with the meetings said.
“We can use the existing equipment, labour and regional waste streams to show the rest of the country how to bring back our jobs and industries," Randy LeTang, chief executive of Philadelphia-based S.G. Preston, said in a statement.
Financial terms of its proposal could not immediately be learned.
PES did not immediately respond to a request for comment.
S.G. Preston in 2016 agreed to supply airline JetBlue more than 33 million gallons a year of a biofuel blend that is made from 30% plant-based oils and designed to reduce greenhouse gas emissions compared with conventional fuels.
"This is what the PES refinery and other idled or closed oil refineries can become to meet the domestic and global demand for cleaner fuels and energy, and safer air," said LeTang.
Company representatives this week met with local trade groups, union officials and members of the city's economic development agency to discuss the proposal, the sources said.
Some of the local steelworkers union members laid off from PES could be hired by S.G. Preston, the sources said, but it was not clear how many jobs the biofuels plan would create. Most of PES's 1,100 employees already have been dismissed.
Other details about the proposal, including the volume of biofuels that would be produced or the number of employees needed to make the fuels at the site, could not immediately be learned.
PES filed for bankruptcy protection on July 21, a month after a fire damaged the Girard Point side of the refining operation. It is in the process of idling the facility, and shut its last crude unit late last month.
(Reporting by Laila Kearney in Philadelphia; Editing by Marguerita Choy)
