UPDATE 1-Petroplus' Coryton secures fresh crude supplies

By Zaida Espana and Claire Milhench
LONDON, Feb 15 (Reuters) - British refinery Coryton
will continue to operate for at least three more months after
PwC, the local administrator for insolvent refiner Petroplus
, secured a deal to ensure continued crude oil
deliveries.
Under the agreement, Morgan Stanley Capital Group Inc
and private equity investors KKR Asset Management LLC
and AtlastInvest will provide crude to the refinery and pay a
fee for its services, a spokeswoman for PwC said.
The three will then take ownership of the refined products.
"This arrangement allows the refinery to continue to operate
as usual whilst the feasibility of a permanent solution for the
refinery is explored," PwC said in a statement.
The deal is a temporary solution that will run for an
initial three months, allowing the plant to continue to operate
and avoiding a costly shutdown.
Coryton is the most coveted asset of the five European
plants owned by Switzerland-based refiner Petroplus, analysts
and traders have said.
It has a Nelson complexity of 12.0, indicating it can
readily change its product mix depending on the available
feedstock, and it had a benchmark refining margin of $6.54 a
barrel in the first nine months of 2011.
Steven Pearson, joint administrator and partner at PwC, said
the deal creates 'vital stability' for the refinery while a
long-term solution is sought.

OUTLOOK FOR CORYTON
Petroplus, Europe's largest independent refiner by capacity,
filed for administration in several jurisdictions after
defaulting on $1.75 billion of debt.
Europe's refining sector has suffered from a combination of
oversupply and weak margins, which in the case of Petroplus was
compounded by a highly leveraged debt structure.
The deal is significant in the sector as it involves a large
U.S. bank alongside two private equity investors.
Morgan Stanley has shown a long-standing interest in
Europe's refining sector, having reached a similar deal with
Ineos Refining to supply crude oil and market refined
products back in 2007.
PwC said it would continue to work with Morgan Stanley, KKR
and AtlasInvest to examine all long-term options, which include
a sale of the business or a refinancing.
Coryton has attracted widespread interest, with suitors said
to include Russian and Asian energy players.