March 29, 2012 / 7:30 PM / 7 years ago

Conoco has multiple bids for Trainer refinery-sources

NEW YORK (Reuters) - ConocoPhillips (COP.N) has at least five bids for its 185,000 barrel per day Trainer, Pennsylvania refinery, according to sources familiar with the sales process on Thursday.

A Conoco Phillips gas station in Boulder, Colorado January 24, 2007. REUTERS/Rick Wilking

“There is more than one bid to operate the plant as a refinery,” said one source.

The other bids are to turn the refinery into a terminal to store gasoline and diesel to serve the U.S. Northeast, where refinery closures have cut operable capacity by over 25 percent so far.

The Trainer refinery was idled at the end of September after the company decided to put it up for sale.

A ConocoPhillips spokesman was unable to comment on the sales process other than to say that the company had recent interest from potential buyers.

On Wednesday, ConocoPhillips said it was extending the sales deadline by two months to the end of May because of new potential sales interest.

The news of renewed interest to buy the plant and run it as a refinery is good news for the region, where three refineries have closed by the end of 2011.

On Wednesday, the Energy Information Administration, the statistical arm of the Department of Energy, cut the baseline for calculating the region’s operable refining capacity by 430,000 bpd to about 1.2 million bpd to reflect the refinery closures.

Most Northeastern refineries are designed to run only light, sweet crude oil imported from Europe and Africa, and priced at a premium to other crude oils which cuts profit margins, already down on slowing gasoline demand.

Hardest hit by the closures is the Philadelphia region, where three refineries in a 12-mile (19-km) radius are closed or slated for closure.

This includes the Trainer plant and neighboring Marcus Hook plant, a 178,000 bpd refinery owned by Sunoco Inc (SUN.N) which closed at the end of 2011.

Sunoco also put its 335,000 bpd Philadelphia refinery up for sale. The company has said it has buying interest but said if a deal doesn’t come through it will close the plant, the longest continuously operating refinery in the nation, by July 2012.

United Refining, a privately held refining company which operates a 65,000 bpd refinery in the northwest corner of Pennsylvania, has expressed interest in the facility.

Sunoco is looking to exit the refining business where it has been losing money, the company said.

If the plant closes, refinery closures in the U.S. Northeast will reach 50 percent, according to EIA calculations, leaving the area vulnerable to price spikes and supply disruptions.

Also out of the EIA calculation of base operable refinery capacity is the 64,000 bpd Yorktown, Virginia refinery.

That refinery was sold by Western Refining WNR.N to Plains All American (PAA.N) and will be used as a storage terminal for gasoline and diesel.

Reporting By Janet McGurty; Editing by Marguerita Choy

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