PHILADELPHIA (AP) — Sunoco Inc. is in talks with a global asset manager about a possible joint venture at its Philadelphia refinery, which is slated for closure if a buyer isn't found.
Sunoco announced Monday it has entered into "exclusive discussions" with The Carlyle Group about a possible joint venture involving the 330,000-barrels-per-day facility, which has about 850 workers and is the largest refinery on the East Coast. Under the proposed transaction, Sunoco would contribute the refinery assets in exchange for a non-operating minority interest in the venture. Carlyle would contribute cash, hold the majority interest and oversee day-to-day operations.
Sunoco previously said it would shut down the Philadelphia facility if a buyer wasn't found by July. On Monday, the company extended that deadline by a month, saying it would move forward with idling the plant in August if the transaction with Carlyle can't be completed.
"We are working actively with Sunoco and other stakeholders to explore ways to keep this vital facility operating," said Rodney S. Cohen, The Carlyle Group's managing director. "The facility has been operating at a significant loss for some time, and we are exploring every avenue to create a viable plan. It is a heavy lift and we are not sure a solution is possible, but we are doing the work."
Sunoco President Brian P. MacDonald cited The Carlyle Group's track record of leading successful business turnarounds, something he said is essential in a project like this one.
"We believe having a strong partner like Carlyle with a track record of leading successful business turnarounds is necessary to preserve the facility's future," MacDonald said in a statement.
Sunoco has already shut down its refinery in suburban Marcus Hook. Another company, ConocoPhillips, has shut down operations at its refinery in the suburb of Trainer.
The United Steelworkers, which represents workers at the plant, said it was ready to work with any party to keep the refinery in operation.
"The USW is more than willing to work with all levels of government and any willing party who has the common goal with us to keep these East Coast refining facilities in operation," USW International President Leo W. Gerard said in a statement. "We continue to believe their ongoing operation is crucial not only to the thousands of our members employed there but to the surrounding communities and to effectively deal with the nation's fuel and energy issues."
U.S. Rep. Pat Meehan, R-Pa., said in a statement that he was encouraged by Monday's news and continued to hold out hold for the facility's future.
"I appreciate the intention to keep the Philadelphia site operating as a refinery, and as always we stand ready to assist in any way possible," he said. "I encourage all parties to continue their efforts on behalf of the workers and the community for a positive outcome."