Two petroleum industry developments Monday should spell good news for Northeast motorists, adding to the region's supply of gasoline and putting downward pressure on prices, an expert says.
Both Sunoco and Conoco-Phillips own refineries that supply the East Coast. Sunoco's refinery in Philadelphia has been up for sale and could have closed as early as the end of July if no buyer was found. ConocoPhillips' Trainer, Pa., refinery closed last year.
Andy Lipow, president of Houston consulting firm Lipow Oil Associates Llc, thinks Energy Transfer Partners is likely to sell the Sunoco refinery and its 4,900 gasoline stations and that the purchaser will continue operating the refinery.
"This is good news for consumers because it's going to produce gasoline and distillate fuels in an area where we were concerned about supply shortages," he said.
Energy Transfer chief executive and chairman Kelcy Warren spoke Monday only of diversification, not divestiture. But The Wall Street Journal said on its website last night that "Energy Transfer appears to want no part of the actual refining business," and that Sunoco "will continue its plans for exiting the refining business" and is in talks to become a minority partner in the refinery.
Lipow said that while Delta is purchasing the Conoco-Phillips refinery for jet fuel production, unavoidable byproducts of the refining process include gasoline, diesel fuel and heating oil.
Concerns about shortages in this region this summer have been among a number of factors, including more expensive crude oil, that drove gasoline prices up by more than 60 cents a gallon on Long Island beginning in late December until April 10, when the local average for regular was $4.169. Prices have slid since then; regular averaged $4.105 here Monday, according to the AAA.
Adding to those fears was the closure last year of another Sunoco refinery, in Marcus Hooks, Pa., and the closure earlier this year of a refinery in St. Croix, part-owned by Hess, that also served this region.
With Bloomberg News