Sunoco Inc.'s oil refinery in Philadelphia has at least four potential buyers, and ConocoPhillips has one, and possibly two, offers for its idled Trainer refinery, an oil analyst with an independent trade publication said Monday.
"The entire dynamic of the U.S. East Coast markets may be about to change," said Tom Kloza, chief oil analyst with the Oil Price Information Service in a note to subscribers. Kloza said bids for the Sunoco plant were due Monday and "multiple sources" in refinery mergers and acquisitions have told him there were "at least four tenders" for Sunoco.
One of them is Radnor-based Preferred Energy L.L.C., which has put in a "substantial bid," and would continue to operate the 335,000 barrel-a-day complex as a refinery, said Preferred president and CEO Michael O'Neill.
"All the principals are from Philadelphia. We would love to see the place stay open. We have put together a great team of refinery operators, energy traders, logistics and oil industry and financial partners," O'Neill said.
Other possible bidders include United Refining Co., owned by John Catsimatidis, who put in an "initial bid although some sources believe that this company would only operate the refinery if they receive quite a few government and union concessions," Kloza said.
Also bidding was PBF Energy, which operates the former Valero refineries in Delaware City and Paulsboro, and the Wall Street private equity-based Apollo Global Management L.L.C., which "has been looking at U.S. and European based refineries for some time, and has looked to do deals with wraparound crude oil supply coming from investment house JP Morgan," Kloza said.
Sunoco spokesman Thomas Golembeski said, "We are still trying to sell Philadelphia refinery as an operating refinery. We are still talking to interested parties, but that's the extent of what I can say."
Separately, ConocoPhillips has one or two possible suitors. Kloza said that Delta Air Lines, or a company affiliated with Delta, may bid on the Trainer refinery "with intent to maximize jet fuel production for its operations in the Northeast United States. It is not known whether the airline has a partner to handle the extraordinary capital needs of operating a refinery, and securing crude and feedstock needs," Kloza wrote. "For an airline to buy a refinery, which is an incredibly capital-intensive business, would be unprecedented in this country."
Delta is the world's second largest airline after merging with Northwest, with a hub at New York's JFK airport and a big operation at New York LaGuardia airport.
"At least one other company, said to be a crude oil producer with access to Bakken crude is believed to have advanced interest in the Trainer refinery," Kloza said in the report. "Sources believe that any operators of Philadelphia or Trainer still have a lot of work ahead of them, including negotiations with unions as well as sweeteners from local, state, and federal groups that want to see both refineries remain part of the mix."
"I'm pretty confident that we've got some real good buying interest in Philly," he said. "I'm pretty confident that we are not going to see the Sun Philadelphia refinery close on July 1." Kloza said his information is less certain for ConocoPhillips "because I don't know what contingencies might be there for a potential operator.
"I don't hear anyone looking at the closed refinery at Marcus Hook, unfortunately," Kloza added.