MOSCOW (MRC) -- A sale of the Philadelphia Energy Solutions oil refinery site to real estate developer Hilco is expected to close next week for USD27.5 million less than planned, the bankrupt refiner said in a court filing, said Hydrocarbonprocessing.
Hilco Redevelopment Partners won an auction in January to buy the 1,300-acre (526-hectare) south Philadelphia refinery with plans to transform it into a mixed-use industrial park. It agreed to pay USD252 million for the site. The Chicago-based developers, citing economic uncertainty caused by the coronavirus pandemic and higher-than-expected environmental costs tied to cleaning up PES land, asked to amend the agreement and delay the sale earlier this month, the filing said.
PES agreed to lower the price contingent partly on Hilco finalizing the deal by June 26. The United States Bankruptcy Court for the District of Delaware must sign off on the amended sale agreement. The refiner shut its 335,000 barrel-per-day refinery, the largest and oldest on the East Coast, and filed for Chapter 11 bankruptcy last summer after a fire at one of its fuel processing units badly damaged the plant and leaked toxic chemicals into the air.
More than 1,000 workers were laid off, including 640 United Steelworkers members. Executives of the company, which had just emerged from a separate bankruptcy at the time of the June 21 blaze, have received millions of dollars in bonuses since the shutdown.
Union workers, who were let go without access to extended health benefits typically given to laid-off employees, will receive several thousand dollars apiece in transition pay after the sale is finalized, according to the original agreement. It’s not clear whether that amount will be affected by the amended sale agreement.
As MRC informed before, global oil consumption cut by up to a third in Q1 2020. What happens next in the oil market depends on how quickly and completely the global economy emerges from lockdown, and whether the recessionary hit lingers through the rest of this year and into 2021.
Earlier this year, BP said the deadly coronavirus outbreak could cut global oil demand growth by 40 per cent in 2020, putting pressure on Opec producers and Russia to curb supplies to keep prices in check.
We remind that in September 2019, six world's major petrochemical companies in Flanders, Belgium, North Rhine-Westphalia, Germany, and the Netherlands (Trilateral Region) announced the creation of a consortium to jointly investigate how naphtha or gas steam crackers could be operated using renewable electricity instead of fossil fuels. The Cracker of the Future consortium, which includes BASF, Borealis, BP, LyondellBasell, SABIC and Total, aims to produce base chemicals while also significantly reducing carbon emissions. The companies agreed to invest in R&D and knowledge sharing as they assess the possibility of transitioning their base chemical production to renewable electricity.
Ethylene and propylene are feedstocks for producing polyethylene (PE) and polypropylene (PP).
According to MRC's DataScope report, PE imports to Russia dropped in January-June 2020 by 7% year on year to 328,000 tonnes. High density polyethylene (HDPE) accounted for the main decrease in imports. At the same time, PP imports into Russia rose in the first six months of 2020 by 21% year on year to 105,300 tonnes. Propylene homopolymer (homopolymer PP) accounted for the main increase in imports.
MRC