Philadelphia refinery fire extinguished; alkylation unit destroyed

Philadelphia refinery fire extinguished; alkylation unit destroyed

 

The fire in the alkylation unit at Philadelphia Energy Solutions' refinery was extinguished Sunday, according to company spokeswoman Cherice Corley.

 

We can confirm that the fire in the alkylation unit has been extinguished," Corley said in an email. The refining complex has been running at a reduced rate since Friday, she said.

US Gulf Coast alkylate barge prices closed higher Friday, up 5.12 cents to $2.1559/gal, according to S&P Global Platts assessments, after the market digested news of the fire.

Sources familiar with refinery operations said the unit needs to be "completely rebuilt" after several refinery workers got a "good view of the unit and said it's total ruined."

Corley did not confirm the state of the unit.

Alkylates are necessary to make gasoline which meets summer grade standard, comprising about 15% of the finished gasoline pool. It is also an octane enhancer necessary to make premium grade gasoline.

It is unknown if PES will rebuild the unit. The entity filed for bankruptcy in 2018 and continues to struggle financially due to weak margins.

Formed in 2012, when Carlyle and Sunoco joined forces to keep the refinery operating in the wake of the closure of several area plants, it is the largest refinery on the US Atlantic Coast at 335,000 b/d.

Refinery sources said the unit was on the Girard Point side of the plant. Total alkylation capacity for both the Girard Point and Point Breeze sections is 26,500 b/d, according to Energy Information Administration data.

Volumes of alkylate moving from Europe to the USAC have yet to pick up, according London gasoline traders.

"We are not seeing any increased pick-up on this side of the pond," said one London gasoline trader. "The paper arb has improved but it's not filtering down into physical yet."

Europe is a key supplier of gasoline blending components, which includes alkylates, reformats and naphtha, to the region. The USAC imported 344,000 b/d of motor gasoline blending components for the week ended June 14, according to the most recent weekly data from the EIA.

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Here is my hunch: those PES guys will simply buy in their alkylate needs instead of spending capital they don't have to rebuild what they will need to remove, remediate, and then reconstruct.  Feedstock stuff is cheap enough ex-Rotterdam, there is lots around, so spending a billion that you would need to borrow against the collateral of a refinery that does not make any serious money is not going to happen. 

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