The closure of the massive, troubled Philadelphia Energy Solutions oil refiner following last week's fire will be a good thing for tankers, says Pyxis Tankers' Eddie Valentis.
"[Pyxis Tankers] affirms that the closure of the Philadelphia Energy Solutions refinery will positively impact the MR product tanker segment, especially in the Atlantic basin," the Greek executive said via the company Twitter account Thursday morning.
The refinery, which sat on a 1,300-acre lot along the Schuykill River, processes 335,000 barrels of crude oil per day, including 175,000 bpd of gasoline. It represented more than a quarter of all US east coast refinery capacity.
Last Friday's fire, which broke out when a vat of butane ignited, sparking smaller fires across the facility, was the latest bit of bad luck for Philadelphia Energy Solutions. Late last year, the Sunoco-Carlyle Group joint venture declared bankruptcy. Last month, the company said it was deferring retirement plan payments for its unionized employees.
Stifel analyst Ben Nolan said the closure could bump the global refined product trades by 1.4%.
"We would expect much of the import volumes to come from Europe and be particularly beneficial for MR product tankers," he wrote.
He said Jones Act crude tankers from the Gulf of Mexico do not deliver to the refinery and would not be immediately effected. Meanwhile, crude tankers could see "some modest loss of volume."
According to media reports, the closure will result in immediate layoffs for 100 non-union employees, with the 700 union employees will be laid off between now and mid-July.
