Zombie Refineries

Theeey’re baaack. Atlantic Basin refineries that the market had relegated to the graveyard of unfit plants in an expanding world of more-sophisticated Pacific Basin capacity, are coming back to life under new management. During the past week, three announcements reminded market participants that refinery capacity is hard to kill. Delta Air Lines Inc. agreed to buy the 185 kbpd Trainer, PA refinery from ConocoPhillips (Phillips 66) for $150 million. Vitol and the co-founder of Petroplus have jointly agreed to acquire insolvent Petroplus’ 68 kbpd Cressier refinery in Switzerland for “substantially less than $50 million”. Finally, trading firm Gunvor announced that it will be restarting Petroplus’ 108 kbpd Antwerp refinery this month, after agreeing to purchase the plant in early-March this year. The following chart illustrates these restarts, following the 1 mbpd capacity purge of 1q12. Download here