HOUSTON, Sept 24 (Reuters) - Houston-based oil producer
Hilcorp is evaluating Phillips 66's refinery
in Alliance, Louisiana, for conversion into an oil export
terminal, said four sources familiar with the matter, a move
that would eliminate it as a source of motor fuels.
Hilcorp, the largest privately owned U.S. oil producer, with
operations from Alaska to Pennsylvania to Texas, did not reply
to questions about its interest in the facility, which occupies
2,400 acres along the Mississippi River.
The sources said a buyer was scheduled to visit the refinery
Phillips 66 declined to comment on a buyer's possible visit
to the refinery this week.
The hurricane-damaged refinery remains for sale and its
"marketing process is ongoing, said Phillips 66 spokesperson
Bernardo Fallas. The company plans to repair the storm damages
and restart the facility, he said.
In August, Phillips 66 began meeting with potential buyers
of the 255,600 barrel-per-day (bpd) refinery in Louisiana, on
the state's southeast coast. It was knocked out of commission by
Hurricane Ida last month when a protective wall gave way,
flooding the plant.
The U.S. refining business in the future is going to be
smaller, not bigger, Phillips 66 Chief Executive Officer Greg
Garland said last month as he laid out plans to advance
businesses in renewable diesel, hydrogen and materials for
Most of the several feet of water that flooded the plant has
been removed and most employees have returned to clean-up of the
plant, said people familiar with its operations.
In June, the U.S. Energy Information Administration said
national refining capacity last year fell by 4.5%, or 848,385
bpd, because of weak refining profits with work-from-home
policies slashing gasoline demand.
A conversion of the Alliance site into a crude oil storage
and distribution terminal makes sense, said Andrew Lipow,
president of Houston consultants Lipow Oil Associates.
These refineries are getting older and older especially in
a climate where we have seen gasoline demand has peaked, Lipow
The Alliance refinery is one of three along the Gulf Coast
that has been offered for sale this year.
The other two are LyondellBasell Industries
263,776-bpd Houston refinery and Royal Dutch Shells
shuttered 211,146-bpd Convent, Louisiana, refinery.
The Alliance refinery could still have a future in the
current energy transition, said John Auers, executive vice
president with refinery-consultants Turner, Mason & Company
Its still a viable refinery, Auers said. Weve had a lot
of capacity turned off. It could potentially come back pretty
Phillips 66 does have an incentive to make repairs, Auers
You always get more money (for a refinery) if its in an
operable condition, Auers said.
(Reporting by Erwin Seba in Houston; Editing by Gary
McWilliams, Matthew Lewis and Daniel Wallis)