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Sale of shut Philly refinery to real estate developer delayed

June 03/2020

MOSCOW (MRC) -- The closing of a USD252 million sale of the Philadelphia Energy Solutions (PES) oil refinery to a Chicago-based real estate developer has been delayed, reported Hydrocarbonprocessing with reference to a city official and source with knowledge of the agreement.

Hilco Redevelopment Partners won an auction in January to purchase the 1,300-acre site along the Schuylkill River in south Philadelphia. The companies were scheduled to close on the purchase agreement by the end of this month.

City of Philadelphia officials were told the closing was delayed, a city spokesman said by email. He did not offer additional details. Another source with knowledge of the deal said it was postponed this week.

Hilco and PES did not respond to requests for comment about the cause and duration of the delay.

The 335,000 barrel-per-day oil refinery shut last summer after a fire destroyed a section of the plant and released toxic chemicals into the air.

PES filed for Chapter 11 bankruptcy in July and put its refinery, which was the largest and oldest on the US East Coast, up for sale. More than 1,000 full-time workers were laid off, including 640 United Steelworkers.

The United States Bankruptcy Court for the District of Delaware in February approved the transaction with Hilco, whose plan has been to transform the site into a mixed-use industrial park, and seemingly secured the permanent end to operations at the plant.

The bankruptcy judge also signed off on a backup bidder, developer Industrial Realty Group, LLC, in case the deal with Hilco fell through.

PESТ unsecured creditors and union representatives initially opposed the sale to Hilco and pushed for Industrial Realty Group, which had entertained the possibility of leasing part of the site for refining.

Whoever purchases PES will face liabilities tied to cleaning the deeply-contaminated site, an issue that scared away potential buyers earlier in the sale process.

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

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 721,290 tonnes in the first four month of 2020, up by 4% year on year. Low density polyethylene (LDPE) and linear low density polyethylene (LLDPE) shipments grew partially because of the increased capacity utilisation at ZapSibNeftekhim.  At the same time, PP shipments to the Russian market totalled 347,440 tonnes in January-April 2020 (calculated by the formula production minus export plus import). Supply exclusively of PP random copolymer increased.
Author:Margaret Volkova
Tags:PP, PE, LLDPE, crude and gaz condensate, PP random copolymer, propylene, LDPE, ethylene, petrochemistry, Rossiya, USA.
Category:General News
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