Delta oil refinery announcement could come this week-sources
By Janet McGurty
NEW YORK, April 17 (Reuters) - A deal for Delta Air Lines to buy ConocoPhillips' 180,000 barrel per day (bpd) refinery in Trainer, Pennsylvania could be announced as early as this week, according to two sources with knowledge of the negotiations.
The deal, which could help ease a potential shortfall in fuel in the East Coast this summer, would entail the airline partnering with JP Morgan to help run the idled refinery.
"It is accurate to say that Delta's deal to buy Trainer will be announced this week," said one of the sources.
Analysts have said the purchase would be aimed at lowering the No. 2 air carrier's fuel costs. A spokesman for ConocoPhillips said the company did not comment on market rumors or speculations and that it was continuing efforts to find a buyer for the refinery. Delta declined to comment.
Trainer is one of three refineries in the Philadelphia area that have been pushed to the brink of closure by the high cost of crude oil feedstock and waning fuel demand. The plant makes a higher percentage of jet fuel than any other refinery on the U.S. East Coast, accounting for a third of the jet-kerosene capacity for the region.
Under the proposal, Delta would purchase the refinery and JP Morgan's commodities team would finance the refining process, including buying and shipping crude oil from overseas, sources told Reuters last week.
JP Morgan was not immediately available for comment.
Delta, which has struggled with high fuel costs, would then buy the jet fuel from JP Morgan at a wholesale rate, and the bank would sell the other products made by the refinery into the market, the source said. Continued...