New Jersey Refinery Becomes Latest Casualty of Collapse in Fuel Demand
(Bloomberg) - PBF Energy Inc.'s Paulsboro Refinery in New Jersey is the latest oil refining facility to fall victim to a Covid-induced collapse in fuel demand and announces plans to cease operations for the foreseeable future.
The company plans to lay off 250 workers at the 160,000-barrel-a-day plant and shut down fuel production due to low demand, according to a letter to Bloomberg employees. Paulsboro will continue his lubrication and asphalt work, the letter says.
"The move was triggered by an unexpected, expanded destruction of fuel demand related to Covid-19 policy," said Chief Executive Officer Tom Nimbley's letter. PBF will announce further details in the context of the earnings statement for the third quarter, said company spokesman Michael Karlovich
The nationwide decline in fuel demand due to lockdowns related to pandemics and reduced travel has already forced the announced shutdown or conversion of at least six refineries since March. Gasoline demand fell in late spring and summer and, according to government figures, is still around 8% below the five-year average.
"With limited leverage and significant exposure on the east and west coasts, PBF is one of the independent refineries most vulnerable to a prolonged recovery," Bloomberg Intelligence analysts Fernando Valle and Brett Gibbs said in a note.
The Paulsboro plant's fuel production facilities will be decommissioned and held for a possible reopening in the future, according to the company's letter. When the refinery reopens, it will produce partially refined raw materials that will be sent to the company's refinery in Delaware City.
The refinery is the first to shut down on the east coast since the virus decimated fuel consumption. To date, all of the other decommissioned refineries are in the western United States.
Marathon Petroleum Corp., the largest U.S. refiner, will convert its Martinez, California refinery into a terminal facility at 166,000 barrels per day, and potentially add a renewable diesel facility at 48,000 barrels per day as early as 2022. It will also shut down Gallup's 26,000-barrel-a-day refinery in New Mexico is transforming its Dickinson, North Dakota, 19,000-barrel-a-day facility into a renewable diesel plant by the end of 2020. Phillips 66 is converting its rodeo with 120,200 barrels per day from a refinery near San Francisco to a renewable energy facility that uses used cooking oil, fats, fats and soybean oils to produce so-called renewable diesel, gasoline and jet fuel. The 44,500 barrels per day Santa Maria refinery in the south will be permanently closed by early 2023. GlyFrontier Corp. will turn their 48,000 barrels per day in Cheyenne, Wyoming into a renewable diesel plant by 2022.
More articles of this type can be found at bloomberg.com
Subscribe now to stay up to date with the most trusted business news source.
© 2020 Bloomberg L.P.
In this article
Click to receive the most important news as a notification!
'So angry': Chinese football clubs ordered to change names
NBA Fans React to Rockets Trading Russell Westbrook to Wizards for John Wall and First-Rounder
Pelosi and Schumer Make a Big Concession on Stimulus
Dodgers acquire Corey Knebel, offer contracts to all arbitration-eligible players
He killed a woman and held her roommate hostage on Thanksgiving, cops say. He’s charged.
Rian Johnson Considered Using Anakin Skywalker in ‘The Last Jedi,’ but It Was Too Complicated