Thursday, February 27, 2020

Fire-Damaged Philadelphia Oil Refinery Heads for Auction

January 17, 2020

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The fate of the largest East Coast oil refinery is set to be decided on Friday in an auction that could determine whether the Philadelphia plant is restarted or used for a different purpose for the first time in over a century.

The refinery's owner, Philadelphia Energy Solutions, is scheduled to reveal the winning bidder on Wednesday during a hearing at the United States Bankruptcy Court for the District of Delaware, which will need to approve the sale.

PES fell into bankruptcy on July 21, a month after a fire and explosions destroyed a portion of its 335,000 barrel-per-day oil refinery complex. It wound down the roughly 150-year-old plant and laid off hundreds of workers over the following weeks.

More than a dozen groups initially showed interest in buying all or parts of the PES refinery and its more than 1,300-acre(526-hectare) lot.

Some bidders have since dropped out, though it is not clear how many.

S.G. Preston Co, a biofuels company that bid for the site, was not in the final round, a source familiar with the bidding said. An official with the company was not immediately available for comment.

The PES site located less than three miles (5 km) from downtown Philadelphia has also attracted bids from several real estate developers.

One of the groups proposed to model itself after the Philadelphia's Navy Yard, which was turned into a campus for company headquarters, including clothing retailer Urban Outfitters, while operating a section for commercial shipping, a source with knowledge of the plan said.

Most of the bids from real estate developers involved keeping the site as an industrial operation, the source said.

Only one group, led by PES's former Chief Executive Officer Philip Rinaldi, has publicly said it planned to restart the complex as an oil refinery at full capacity.

PES's unsecured creditors, which includes companies that had long provided contract work to PES, as well as workers unions, have pushed for a buyer that would restart the refinery, according to two sources familiar with the situation.

Community members have protested against a restart of the refinery, which has been one of the city's biggest polluters. 

(By Laila Kearney, Additional reporting by Tom Hals Editing by Marguerita Choy)

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