London +4420 814 42225
Moscow +7495 543 9194
Kiev +38044 599 2950

Our Clients

Order Informer

Home > News >

Real estate developer in USD240 M deal to buy Philadelphia refinery

January 27/2020

MOSCOW (MRC) -- Real estate developer Hilco Redevelopment Partners has entered into a USD240 million agreement to purchase the Philadelphia Energy Solutions oil refinery, which was the largest and oldest on the East Coast, according to court documents, said Hydrocarbonprocessing.

Chicago-based Hilco submitted the winning bid, which includes an escrow amount of USD30 million, in an auction last week for the Philadelphia site, documents filed with the U.S. Bankruptcy Court for the District of Delaware show. The sale still needs to be approved by the bankruptcy court, and Los Angeles-based developer Industrial Realty Group, LLC, was selected as the backup bidder, the documents show.

The plan is scheduled to be submitted to the court for approval on Feb. 6. PES filed for bankruptcy on July 21 and put its 335,000-barrel-per-day plant up for sale a month after a fire and explosions destroyed part of the refinery. With PESs closure, more than 1,000 workers were laid off, including 640 local United Steelworkers members.

Hilco, which has acquired 5,000 acres (2,023 hectares) in North America, specializes in redeveloping obsolete industrial sites, dimming the prospect that the PES complex will be revived as an oil refinery.

Philadelphia Mayor Jim Kenney said in a statement that while the city expects challenges and years of work ahead, it is optimistic Hilco will develop the more than 1,300-acre site in a way that is more environmentally friendly and contributes to the regional economy.

"We welcome the selection of Hilco Redevelopment Partners as the winning bidder for the refinery site," Kenney said. City officials met with bidders during last weeks auction and were briefed on the track records of the various parties, but they were not given specific details of the proposals.

Hilco did not respond to requests for comment on its plans for the South Philadelphia site, which has been used to store and process hydrocarbons for about 150 years.

However, a stakeholder who was briefed by Hilco representatives in the days leading up to the auction said the company intended to use part of the site for light industrial purposes, including storage.

More than a dozen groups showed initial interest in buying PES, but only one publicly stated intentions to revive the site as an oil refinery at full capacity.

A sale to a real estate developer, either Hilco or IRG, does not preclude former bidders from leasing space on the site, according to two sources familiar with other proposals for PES.

As MRC informed earlier, Philadelphia Energy Solutions (PES) filed for Chapter 11 bankruptcy protection, the company said, its second such filing in less than two years, after a fire last month prompted it to close the largest refinery on the US East Coast.

Ethylene and propylene are feedstocks for producing polyethylene (PE) and polypropylene (PP).

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 1,904,410 tonnes in the first eleven months of 2019, up by 6% year on year. Shipments of all PE grades increased. PE shipments increased from both domestic producers and foreign suppliers. The PP consumption in the Russian market was 1,161,830 tonnes in January-November 2019, up by 7% year on year. Deliveries of all grades of propylene polymers increased, with the homopolymer PP segment accounting for the largest increase.
Author:Anna Larionova
Tags:petroleum products, crude oil, PP, PE, petrochemistry.
Category:General News
| More

Leave a comment

MRC help


 All News   News subscribe