Now that ConocoPhillips has agreed to sell its Trainer refinery to Delta Air Lines, and Sunoco Inc. is engaged in talks to run its Philadelphia refinery as a joint venture, the immediate fate of only one of the region's endangered refineries remains clouded in uncertainty.
Sunoco's Marcus Hook refinery, which company officials say aroused no interest from potential buyers to run as a refinery, is being groomed instead as a potential multipurpose industrial site for storing, handling, and even processing fuel, including by-products from the Marcellus Shale region.
The Delaware County Industrial Development Authority this month is expected to complete a fast-track study to explore possible uses for the site, said J. Patrick Killian, director of the county Commerce Center. Sunoco idled the refinery in December, citing mounting losses and diminished markets for refined products.
"Everybody's preference was to keep it as a refinery," Killian said. Now the focus of officials is to encourage new businesses to inhabit the site — which occupies more than one square mile on the Delaware River waterfront — with the aim of replacing most of the refinery's 590 lost jobs.
"A year from now, you could have seven or eight industries over there," Killian said.
The 781-acre Marcus Hook site, which Sunoco operated for more than a century, includes port facilities, vast fuel-storage capacity, and pipeline connections that would make it attractive as a fuel terminal.
It also has a unique feature: five underground storage compartments carved out of the bedrock in the late 1950s known as "the caverns" that can hold two million barrels of pressurized liquid fuels such as butane or petrochemicals.
But a fuel terminal would employ only a fraction of the refinery's workforce.
Sunoco's merger with Energy Transfer Partners L.P. of Dallas, announced last week, also may present some new opportunities for repurposing the Marcus Hook property, said Brian MacDonald, Sunoco's chief executive officer.
ETP is primarily a pipeline company, and one of the attractions of Sunoco was getting control of Sunoco Logistics Partners L.P., which operates its own network of pipelines built initially to handle Sunoco's crude oil and refined products.
Sunoco Logistics has established a beachhead in Pennsylvania's Marcellus Shale natural gas region with its projects to transport ethane, a liquid by-product of gas production, to petrochemical markets through Sunoco's existing pipeline network. Sunoco is working with MarkWest Energy Partners L.P., which processes natural gas on behalf of drilling companies.
Sunoco Logistics and MarkWest are moving forward with a plan called Mariner West to ship ethane to Ontario industries, which convert the ethane into an ingredient used in plastics manufacturing. A second plan, called Mariner East, would deliver ethane from Western Pennsylvania to the Delaware River for shipment by sea to petrochemical producers on the Gulf Coast.
Such a project would require the construction of new, refrigerated aboveground storage tanks near the shipping terminal, said Thomas P. Golembeski, Sunoco's spokesman.
Kelcy Warren, ETP's chief executive, said in an interview last week that the Mariner projects are examples of the type of ventures that the Texas company would be unable to accomplish without the Sunoco acquisition. "We really like that project a lot," he said.
The Mariner East project, like the fuel terminals, does not promise to employ a large number of people after it is constructed, since it would involve a handful of people to transfer the liquid ethane to tankers.
But public officials hope that the introduction of Marcellus Shale products into the region might spin off other industries that would use natural gas either as a fuel source or as a raw material, such as a petrochemical plant.
"We've got a real possibility for this region," said U.S. Rep. Patrick Meehan, (R., Pa.), whose district includes the Marcus Hook refinery as well as the neighboring ConocoPhillips refinery in Trainer, which Delta announced last week it has agreed to buy for $180 million.
Meehan said the two immediate priorities are maintaining the ConocoPhillips site as a working refinery and to assist Sunoco Inc. with consummating its talks to operate the sprawling Philadelphia refinery as a joint venture, with the Carlyle Group, an equity investment firm, taking the lead role.
"We have the chance to make Marcus Hook the center point for the development of energy because of the natural gas," he said. "It's a longer term vision."
The addition of Sunoco's new Texas parent company, Meehan said, "should infuse a great deal of potential capital into the equation."
Sunoco's Golembeski said that while the merger is pending — it is expected to close later in the year — Sunoco is continuing to market the site on "sort of a parallel path" to the efforts of Delaware County officials.