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Delta Air begins restarting Trainer refinery in US

09.06.2012  | 

Delta chief executive Edward Bastian said at the Deutsche Bank Aviation and Transportation Conference on Thursday that the refinery is on track to start producing jet fuel by the end of September. Mr. Bastian said he expects the refinery to generate hundreds of millions of dollars in savings.

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By ALISON SIDER

Some units of a Pennsylvania refinery owned by a subsidiary of Delta Air Lines will restart this weekend, a Pennsylvania environmental official said Thursday, and the company expects the refinery to be up and running by the end of the month.

Delta chief executive Edward Bastian said at the Deutsche Bank Aviation and Transportation Conference on Thursday that the refinery is on track to start producing jet fuel by the end of September.

Delta announced in April that its subsidiary Monroe Energy had agreed to buy the refinery from Phillips 66 with the aim of making modifications to increase jet fuel production there.

Mr. Bastian said he expects the refinery to generate hundreds of millions of dollars in savings.

“We expect to generate $300 million in annual savings, a benefit that you will start to see in the upcoming Q4 numbers,” Mr. Bastian said, adding that it could be more since the spread between crude oil and jet fuel prices is higher than the company had expected.

Lynda Rebarchak, of the Pennsylvania Department of Environmental Protection, said Monroe reported that some units would restart this weekend, while the majority of the facility's operations are expected to be up and running by the end of September.

Ms. Rebarchak didn't know which units will be the first to start up.

The 185,000 bpd refinery in Trainer, Pa., about 10 miles southwest of Philadelphia, has been idle since the fourth quarter of 2011.

Delta said Monroe would spend $100 million to convert the refinery's infrastructure to maximize jet fuel production.

Once it is fully operational, the refinery is expected to produce 52,000 bpd of jet fuel, according to a filing with the Securities and Exchange Commission.

Monroe also agreed to trade gasoline and other refined products produced at Trainer for jet fuel produced at BP and Phillips 66 refineries.


Dow Jones Newswires



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