How Delaware resurrected a refinery

    PBF Energy Partners has agreed to buy the Delaware City refinery from Valero after a hard sell from state leaders.

    Persistence.

    That’s what PBF Energy Partners Chairman Thomas O’Malley says was the key to reaching a deal for PBF to buy the Delaware City refinery from Valero.  O’Malley says Governor Jack Markell (D) fought hard to get the two sides to reach a deal, “This is a Governor who once he discovers your telephone number and wants something from you, he has absolutely no hesitation regardless of where you are, or at what time.”

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    O’Malley says the way the business climate in the refining industry is right now, it’s a buyers market and PBF could have picked from any number of available sites.  He says they picked Delaware because of the cooperation of state and labor leaders, “The lynch pin in this deal was the cooperation of all the people there in Delaware.”  O’Malley says, “We had a very cooperative group of people in the sense of they wanted to get this refinery back working, and whether it was the Governor’s office, the economic support, the unions acting in a very forthright and fast way.”  O’Malley says when he visited the state to examine the refinery, he got immediate reaction.

    Markell says while he was very eager to get the plant back into operation and restore the jobs that were lost, he wasn’t going to get a deal done at any cost.  “Throughout the negotiations, the one area we were not willing to compromise was around protecting public health and the environment.  We’re requiring that the plant produce fewer air emissions than any time in it’s history.  and required significant emission reductions in the coming years, from day one the plant will be 10% cleaner than the last full year of operations.”

    Secretary of the Department of Natural Resources and Environmental Control Collin O’Mara says PBF has committed to reducing air and waste water emissions from the refinery.  “During the negotiations, they were extremely committed to both improving the air outcomes as well as the water impacts that have been at this facility for some time, and we’re confident that we’ll find a solution that simultaneously allows them to be profitable, but also protects the Delaware River.”  He says the company has pledged to reduce it’s water intake by 30% by 2013.

    While strong negotiations and a commitment to the plant helped the two sides reach a deal, Delaware also sweetened the pot a little for PBF with the promise of a $20 million dollar strategic fund loan.  PBF would not have to pay back the loan if the company spends more than $100 million into the plant including 600,000 man hours of labor.  PBF would also have to hire at least 600 people per year for five consecutive calendar years.  The state is also giving the company $10 million dollars for equipment that will control Nitrogen Oxide emissions.  State officials are still negotiating the final form of other incentives.

    PBF plans to have the plant restarted by the 2nd quarter of 2011.

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