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EIA warns of diesel price spike if Sunoco closes Philadelphia refinery

March 01/2012

(hydrocarbonprocessing) -- Prices of ultra-low-sulfur diesel fuel - already at record highs for this time of year - could spike higher if Sunoco goes ahead with plans to shut its 335,000 bpd Philadelphia refinery in July if no buyer is found, US government forecasters warned in a new report issued this week.

Prices of ultra-low-sulfur diesel fuel - already at record highs for this time of year - could spike higher if Sunoco goes ahead with plans to shut its 335,000 bpd Philadelphia refinery in July if no buyer is found, US government forecasters warned in a report.

The plant made up 24% of the refining capacity on the densely populated East Coast as of August, the Energy Information Administration said. Since September, ConocoPhillips shut its 185,000 bpd Trainer, Pa., refinery and Sunoco shuttered its 178,000 bpd Marcus Hook, Pa., refinery.

Those refineries, plus the Sunoco Philadelphia plant, make up 50% of East Coast refining capacity. Additionally, Hovensa, a 350,000 bpd joint venture refinery operated by Hess and Venezuela's state owned Petroleos de Venezuela, which supplied refined products to the East Coast, was shut last week.


"To date, the market transition following the closing of two Philadelphia-area refineries in September and December 2011 has been relatively smooth, but the situation could change," the EIA warned. The closures have been partially offset by the startup of PBF Energy's 182,000 bpd Delaware City refinery in October 2011, which had been shut down in late 2009 by Valero before its sale to PBF Energy, the EIA said.

"However, if Sunoco's Philadelphia refinery, which alone accounted for nearly a quarter of refinery capacity on the East Coast in 2011, were to shut down in July 2012, petroleum product markets in the Northeast could be significantly impacted."

While refining capacity outside the East Coast exists to replace the idled capacity, "transportation constraints may hinder the delivery of products to the Northeast in the short term," the EIA said.



mrcplast.com

Author:Anna Larionova
Tags:oil.
Category:General News
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