South Philadelphia refinery files for bankruptcy after fire, explosion
PHILADELPHIA - The largest oil refinery complex on the East Coast has filed for bankruptcy following a June fire that set off explosions and damaged equipment there.
Philadelphia Energy Solutions previously announced its plants to shut down the South Philadelphia facility, affecting the more than 1,000 workers there.
The amount of gasoline that will be lost from the refinery is sizable, but it can easily be made up by imports from Europe or elsewhere, said Jonathan Aronson, research analyst at Cornerstone Macro.
"We're not expecting any major shocks to retail gasoline (prices)," Aronson said. Consumers are more likely to feel gasoline prices increase due to the price of crude oil, which has been rallying in recent days, he said.
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The refinery has been an important source fueling transportation in the Northeast, which is situated far from Gulf Coast refineries, and "at least temporarily, it's going to require some logistical shifting that could come at a cost," said Kevin Book, managing director at Clearview Energy Partners.
"Old oil refineries on the East Coast are not always the most sophisticated or cost-competitive, so the case for their economic survival has been pretty bleak for a long time," Book said. "Refining in general is a tough business. But it's a lot tougher at one of these old, lower-complexity facilities," he added.
The 150-year-old oil refining complex processes 335,000 barrels of crude oil daily, according to PES. The refinery turns the crude into gasoline, jet fuel, propane, home heating oil and other products.
It started as a bulk petroleum storage facility in 1866, and began refinery operations in 1870.
The company emerged from federal bankruptcy court last year after restructuring its debt, leaving its majority ownership in the hands of investment banking firms Credit Suisse Asset Management and Bardin Hill.
The June fire at the complex broke out early in the morning, and video showed an enormous orange blast bursting into the sky.
It set off three explosions, felt miles away, as the fire plowed through a tangle of pipes carrying fuel across the complex, the company has said. It happened at the Girard Point refinery, one of two at the PES complex in south Philadelphia.
The fire erupted in a tank containing a mix of butane and propane, a fire official said.
The Associated Press contributed to this report.