delta bought a refi...
 
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delta bought a refinery

 
loungestx
(@loungestx)
Advanced Member

Not here, near Philadelphia. They figure they can save $300 million a year by making their own fuel, they paid $150 mill. Maybe that is the correct angle for looking to find a buyer for Hovensa. Especially if it works for Delta there may be other airlines looking to do the same.

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Topic starter Posted : May 1, 2012 4:05 am
Jumbie
(@ohiojumbie-2)
Trusted Member

Bought a "mothballed" refinery that had been vacated years ago..

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Posted : May 1, 2012 9:13 am
Beeski
(@beeski)
Trusted Member

But that refinery near Philly:
a) can probably use natural gas to power / refine the oil
b) doesn't have a $700 EPA "consent decree" (fine) attached to it

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Posted : May 1, 2012 10:24 am
Jumbie
(@ohiojumbie-2)
Trusted Member

But that refinery near Philly:
a) can probably use natural gas to power / refine the oil
b) doesn't have a $700 EPA "consent decree" (fine) attached to it

Got that right Beski 8-). This thing (aka Hovensa) down here is a totally different situation - a lot of "baggage" -like fuel source to power the refinery & the humongus EPA compliance price tag hanging over it.

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Posted : May 1, 2012 11:41 am
vicanuck
(@vicanuck)
Expert

Plus the refinery Delta bought includes exisiting pipelines right to thier airport hub operations.

Definitely a great strategic move on Delta's part.

No such thing is going to happen with Hovensa.

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Posted : May 1, 2012 11:58 am
watruw8ing4
(@watruw8ing4)
Trusted Member

Bought a "mothballed" refinery that had been vacated years ago..

AP says that refinery shut down last fall. (?) State of PA offered Delta a $30 million grant to seal the deal. Wonder if the VI has $30 mil lying around. 🙂

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Posted : May 1, 2012 12:00 pm
vicanuck
(@vicanuck)
Expert

The VI doesnt even have $650 K to pay Abramson for school buses.

DeJonge gave away all the money to Diageo.

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Posted : May 1, 2012 12:22 pm
IslandHops
(@IslandHops)
Trusted Member

Was government funds really given to Diagao? I didn't think so.
In my simple understanding, bonds were floated for the construction of the facility to be paid back by the part of the additional rum tax revenue - or am I wrong. If no bonds, then no factory, no jobs, and no additional revenue to the territory.
Why was this such a bad deal? How about some facts to back up the rhetoric and accusations.

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Posted : May 1, 2012 1:08 pm
OldTart
(@the-oldtart)
Expert

How about some facts to back up the rhetoric and accusations.

What a concept. (tu)

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Posted : May 1, 2012 1:24 pm
jefgar
(@jefgar)
Advanced Member

OK, so they own a refinery. They still have to buy the oil to refine.

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Posted : May 1, 2012 2:40 pm
Jumbie
(@ohiojumbie-2)
Trusted Member

Bought a "mothballed" refinery that had been vacated years ago..

AP says that refinery shut down last fall. (?) State of PA offered Delta a $30 million grant to seal the deal. Wonder if the VI has $30 mil lying around. 🙂

--my bad -last fall is correct.

Will be buying crude from BP.

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Posted : May 1, 2012 6:16 pm
MissJustice
(@MissJustice)
Trusted Member

They can get Larry Knepfer ?sp to run it.

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Posted : May 2, 2012 12:40 pm
Dave
 Dave
(@Dave)
Advanced Member

I wonder if Seaborne or Cape Air know about this???

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Posted : May 2, 2012 10:40 pm
saucey
(@saucey)
Advanced Member

Larry Kupfer just might be the one to run[something] over there. He's been hired by VINGN. He has knowledge of the facility. Should Hovensa decide to sell, the union has first option. Oh, wait! What union? 2nd in line is the GVI, aka, VINGN.

BINGO!

Will the gov't entity VINGN buy the place with our money so they can build castles with our import/port fees?

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Posted : May 3, 2012 2:00 am
Mytcar34
(@Mytcar34)
Advanced Member

I think this is the old Trainer refinery that Conoco Phillips owned. I wish Delta good luck on there venture.I hope they know what there getting in to. If Conoco Phillips could not turn a profit useing there own oil how will Delta having to buy oil from someone else?

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Posted : May 3, 2012 3:11 pm
aerobum
(@aerobum)
Advanced Member

That plus the fact that jet fuel is a small part of the fractionization for crude and I don't understand how Delta is seeing an advantage with this move. If they bought a massive storage facility and wanted to store-forward when prices are lower as a hedge that I could sort of understand (of course they could hedge on the open market without buying facilities as well.)

The airlines can barely manage to keep themselves out of bankruptcy. I've no idea how they think they can make a go at being an independent refiner at a time when refining margins have been and will be challenged for years.

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Posted : May 7, 2012 8:45 pm
STXBob
(@STXBob)
Trusted Member

Maybe Delta just wants to diversify. Petroleum companies seem to be more profitable than airlines.

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Posted : May 7, 2012 8:55 pm
OldTart
(@the-oldtart)
Expert

Delta has a good three year deal with BP for its crude and the rationale behind their decision may be partly based on this and the fact that apparently new fuel-efficient jet engines currently under production won't be off the line for at least the next three years, by which time they can start to gradually replace the older fleet. I'm only basing this thought after reading several articles on the acquisition but that seems to make some sense.

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Posted : May 7, 2012 9:29 pm
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