It looks like Delta Airlines will be the new owner of ConocoPhillips idled refinery in Trainer, Pennsylvania. CNBC reports that a deal could come very soon, worth around $100 million. Delta would use the refinery to produce jet fuel.
“It sounds like they’re closer than a lot of people may have thought just a couple weeks ago,” says Denton Cinquegrana of Oil Price Information Services (OPIS). Denton says it’s unprecedented for an airline to take on the difficult business of producing its own fuel.”That’s the million-dollar question there why an airline would be interested in a refinery. That’s something new, although not something that hasn’t been thought about in the past. But to actually go through with it is obviously something that’s very new,” said Cinquegrana.ConocoPhillips has sustained losses operating the facility but fuel expenses makes up about a third of airline costs. By cutting out the middleman, Delta could see savings.
Delta declined to comment. Earlier this month, spokesman Eric Torbenson said the company “do[es] not comment on rumor or speculation.” Conoco Phillips did not return calls for a statement.
A second refinery in Delaware County owned by Sunoco is also idled, but has not found a buyer. A third refinery in Philadelphia, also owned by Sunoco, has attracted interest. Government analysts have predicted that the loss of the refineries could lead to greater volatility in regional fuel prices.