Exclusive: Delta hires consultant to study refinery options - sources
By Jarrett Renshaw and Jessica Resnick-Ault
NEW YORK (Reuters) - Delta Air Lines has hired a consultant to assess the impact on jet fuel prices if the carrier sells or closes the Philadelphia-area refinery it purchased five years ago to keep fuel affordable, two sources familiar with the process said.
They said the consultant will also study other scenarios involving jet fuel prices and the refinery sector, including the impact if other refineries close.
The U.S. East Coast refining industry is fighting a battle to survive, with concerns about a second wave of plant closures after four refineries shuttered in the past decade due to the rising costs of acquiring crude.
Dallas-based consultancy Baker & O’Brien Inc was asked to perform a financial valuation of the refinery's assets and study other scenarios, such as other regional refineries closing and the financial impact of new emissions regulations, the sources said.
Baker & O'Brien did not immediately respond to a request for comment.
Delta, the world’s largest airline, shocked the industry in 2012 when it rescued the 185,000 barrel-per-day Trainer, Pennsylvania, refinery from near-closure, arguing in part that jet fuel prices in the region would spike if the plant closed.
In a statement to Reuters, the airline confirmed that it had hired a consultant to look at the refinery business, but it did not name the consultant and added that it was a routine assessment and not a precursor to selling or closing the plant.
“Delta has said publicly many times that we are committed to the refinery and that position hadn’t changed," Delta spokesman Trebor Banstetter said, in a statement. "The study was commissioned as a routine evaluation of our investment five years after the refinery was purchased." Continued...