Engineering News

Sunoco US refineries may become ethylene plants, terminals
06 September 2011 18:29  

HOUSTON (ICIS)--US Sunoco executives laid out on Tuesday several options for its Marcus Hook and Philadelphia refineries in Pennsylvania, including the possibility of converting the sites into ethylene plants.

The sites would benefit from the rich ethane reserves in the Marcellus Shale natural gas deposit that is largely concentrated in Pennsylvania.

Additionally, the two sites could also potentially be used as terminals.

Chief executive Lynn Elsenhans said the Marcus Hook facility would especially be suited for a terminal because of its dock facilities, caverns and adjacent tank farm.

Earlier, Sunoco said it plans to exit its refining business and has begun the process to sell its refineries at Philadelphia and Marcus Hook, Pennyslvania, in the US.

Elsenhans said the segment has lost money eight out of the last 10 quarters and faces significant capital outlays to satisfy environmental requirements.

Sunoco will idle the main processing units at the facilities in July 2012 if a suitable transaction cannot be implemented.

The Marcus Hook facility produces 165,000 tonnes/year of benzene, 200,000 tonnes/year of propylene and 165,000 tonnes/year of toluene, according to ICIS plants and projects.

The Philadelphia facility produces 65,000 tonnes/year of benzene, 545,000 tonnes/year of cumene and 180,000 tonnes/year of propylene, according to ICIS.

With its refineries up for sale, Sunoco has decided to focus on its retail and logistics businesses.

The company is also going to strategically review every aspect of its business, it said.

Elsenhans added, “No options are off the table.”

With the separation of metallurgical coke manufacturer SunCoke Energy and the sale of its chemicals business, Sunoco’s decision to exit refining marks a fundamental shift away from manufacturing that will reposition the company, it said in a statement.

The company expects to record a pre-tax non-cash charge of between $1.9bn (€1.3bn) and $2.2bn in the third quarter of 2011, relating to impairment of the plant and equipment in the refineries.

If the processing units are idled, additional pre-tax charges of up to $500m, primarily related to contract terminations, staffing costs and severance, may be incurred, Sunoco said.

“With SunCoke’s recent initial public offering, our complete exit from the chemicals business, and our plan to exit refining, we have an opportunity to take a fresh look at all aspects of the company and gain added perspective on how best to use our cash and maximise the potential for our strong retail and logistics businesses,” Elsenhans said.

($1 = €0.71)

Source: ICIS News

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