EXCLUSIVE oil producer Hilcorp considers purchase of closed refinery in Louisiana – sources



HOUSTON, Sept. 24 (Reuters) – Houston-based oil producer Hilcorp (HILCO.UL) is evaluating the Phillips 66 (PSX.N) refinery in Alliance, Louisiana for conversion to an oil export terminal , said four sources familiar with the matter, a move that would eliminate it as a source of fuels.

Hilcorp, America’s largest private oil producer, with operations from Alaska to Pennsylvania to Texas, did not answer questions about its interest in the facility, which occupies 2,400 acres along the Mississippi River.

The sources said a buyer was due to visit the refinery this week.

Phillips 66 declined to comment on a possible buyer’s visit to the refinery this week.

The hurricane-damaged refinery remains for sale and its “commercialization process is underway,” said Bernardo Fallas, spokesperson for Phillips 66. The company plans to repair the storm damage and restart the facility , did he declare.

In August, Phillips 66 began meeting with potential buyers at the 255,600 barrel per day (bpd) refinery in Louisiana, on the state’s southeast coast. It was taken out of service by Hurricane Ida last month when a protective wall gave way, flooding the plant.

“The refining business in the United States will be smaller in the future, not bigger,” Phillips 66 CEO Greg Garland said last month as he outlined plans to move companies forward in the industry. diesel, hydrogen and renewable materials for electric car batteries. Read more

Most of the few feet of water that flooded the plant have been removed and most workers have returned to clean up the plant, people familiar with its operations said.

In June, the U.S. Energy Information Administration said domestic refining capacity fell 4.5% last year, or 848,385 bpd, due to weak refining profits and policies of working from home reducing the demand for gasoline.

A conversion of the Alliance site to a crude oil storage and distribution terminal makes sense, said Andrew Lipow, chairman of consultants at Houston Lipow Oil Associates.

“These refineries are getting older and older, especially in a climate where we have seen demand for gasoline peak,” Lipow said.

The Alliance refinery is one of three Gulf Coast refineries that have been offered for sale this year.

The other two are the 263,776 b / d LyondellBasell Industries (LYB.N) Houston refinery and the closed 211,146 b / d Royal Dutch Shell (RDSa.L) refinery in Convent, Louisiana.

The Alliance refinery may still have a future in the current energy transition, said John Auers, executive vice president of Refinery Consultants Turner, Mason & Company.

“It is still a viable refinery,” said Auers. “We have had a lot of deactivated capacity. It could potentially come back quite strong.

Phillips 66 has an incentive to make repairs, Auers said.

“You always get more money (for a refinery) if it’s in working order,” Auers said.

Reporting by Erwin Seba in Houston; Editing by Gary McWilliams, Matthew Lewis and Daniel Wallis

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