UPDATE 1-Sunoco's NJ refinery stopped production
(Adds details, CEO's quotes)
NEW YORK, Nov 5 (Reuters) - Sunoco Inc (SUN.N) said on Thursday it is pressing on with idling its 145,000-barrel-per-day Eagle Point refinery in Westville, New Jersey, where all processing units have ceased production this week.
Sunoco's third-quarter crude oil utilization rate was 74 percent, which reflects planned work at the Toledo, Ohio, refinery and a one-month maintenance on a gasoline-making fluid catalytic cracking unit at the Philadelphia refinery, the company added in its quarterly earnings release. [ID:nWNAB1401]
The utilization rate is down from 78 percent in the second quarter for the the northeastern U.S. refiner, whose chairman and chief executive officer, Lynn Elsenhans, on Thursday painted a bearish business outlook.
"We continue to expect a challenging market for petroleum and chemical products due to ongoing economic weakness and additional global supply," Elsenhans said in the statement.
Philadephia-based Sunoco reported a quarterly loss of $312 million compared with a year-ago profit of $549 million.
The company has taken steps to cut costs, including its Oct. 6 announcement of the indefinite idling of the Eagle Point refinery, the CEO added.
The refinery's idling is "an effort to reduce losses in our refining business at a time when weak demand and increased global refining capacity have created margin pressure on the entire refining industry," Elsenhands added.
Valero Energy Corp (VLO.N) and Flying J have already idled refineries while others have cut run rates at their refining complexes as demand for refined fuels such as gasoline or diesel was curtailed due to the economic downturn.
To make up for the shortfall for the lost Eagle Point production, Sunoco's 178,000-bpd Marcus Hook and its 335,000-bpd Philadelphia refineries in Pennsylvania will operate at higher capacity utilization and "allow us to reduce our breakeven costs," the CEO added.
On Oct. 6, a Sunoco official said it would take between four and six weeks to process the crude inventory to completely idle the Eagle Point refinery for the indefinite shutdown.
At the time, Sunoco executives said the simplest way for the independent refiner to cut costs was idling Eagle Point since it is the least interconnected with the rest of the Sunoco refining, retail and logistics network. (Editing by Christian Wiessner)
