Delaware City, DE – Five months after the Valero Corporation announced it was permanently shutting down the Delaware City Refinery, PBF Energy Partners, LP has entered into an agreement with Valero to acquire the refinery and restart refining operations as early as spring 2011.
Since the closure announcement, Delaware Governor Jack Markell has sought a buyer/operator for the plant and eventually helped facilitate the negotiations between PBF and Valero.
At the same time, Governor Markell and his team negotiated with PBF to bring 600 full-time jobs to Delaware, in exchange for certain economic development incentives, should PBF acquire and operate the refinery.
“We want to get people back to work in a way that is responsible, sustainable and protects public health. While there are still specifics to be resolved, today’s announcement is a very significant step forward.” Markell said. “Over the past several months, we have worked hard to save the many hundreds of good-paying jobs at this facility and the related economic contributions to our state’s economy. We are hopeful our efforts will be successful.”
Valero offered the state some early help by agreeing to the Governor’s request for the company to stop dismantling efforts on-site and keep much of the refinery intact so the state could make a more compelling case to potential buyers.
The state agreed to work with PBF after PBF pledged to operate the refinery and make substantial investments in the refinery’s infrastructure.
Those investments should allow the company to meet its agreement with the state, which requires that it will keep annual emissions of Nitrogen Oxides (NOx) more than 300 tons below 2007 levels and reduce those emissions further by 300 tons starting at the end of 2013 and an additional 575 total tons beginning at the end of 2014.
These reductions represent more than an 1100 ton reduction compared to 2007 levels or more than 40%.
Consistent with PBF’s plans to operate the Delaware City property as a modern refinery that is designed to remain viable for years to come, Delaware offered the following economic development incentives:
.Strategic fund loan of $20 million in FY 2011, which would convert to a grant if PBF spends in excess of $100,000,000, which includes 600,000 man hours of labor, during the restart of the refinery and supports at least 600 full-time jobs per year in five consecutive calendar years each year after refining operations are initially restarted;
·In FY 2012, a one-time appropriation of $10 million that must be used for NOx control projects at the refinery;
·Offered volume cap for traditional tax-exempt facility bonds and recovery zone facility bonds in order to assist PBF to finance the construction and installation of a gas/oil hydrotreater, which will reduce NOx emissions by about 300 tons per year and enable the refinery to produce extremely low sulfur fuels, including low-sulfur heating oil used in homes and businesses.
Allocating the State’s volume cap does not represent either a commitment of State funds or an obligation on the part of the State to support any debt issuance by PBF or its affiliates, but simply means that the State is prepared to allocate a portion of its annual volume cap so that PBF can utilize the tax-free nature of this financing vehicle.
PBF and the State continue to negotiate the final form of these incentives.
At a press conference April, 8, the Governor thanked:
·Members of the General Assembly, in particular the leadership of both chambers for their consistent and continued support on this important issue;
·Valero CEO Bill Klesse and PBF Chairman Tom O’Malley for continuing to work with the state and each other towards a completed sale;
·Senator Tom Carper, for his early and active involvement in seeking a buyer for the refinery;
·New Castle County Executive Chris Coons, agreeing to work with PBF on potential local support;
·Secretary Collin O’Mara from the Department of Natural Resources and Environmental Control for the department’s continued commitment to achieving reductions in emissions at the Delaware City refinery;
·Director Alan Levin of the Delaware Economic Development Office for ongoing efforts to help structure the state’s potential investment for these jobs;
·Delaware refinery workers and technicians, who have remained hopeful, supportive and positive during this difficult time.