A Delta Air Lines Inc. subsidiary has agreed to buy the 185,000-b/d Trainer, Pa., refinery near Philadelphia from Phillips 66 Co. for $180 million. Delta said Monroe Energy LLC is buying the refinery to reduce the airline’s fuel costs, and will convert the installation to primarily produce jet fuel.
The Delta unit said the acquisition includes pipelines and other transportation assets, which will provide access to Delta’s jet fuel delivery network throughout the US Northeast, including the airline’s hubs at LaGuardia and JFK airports in New York City. Monroe also agreed with Phillips 66 and BP PLC to exchange gasoline, diesel fuel, and other products from the refinery for jet fuel, effectively providing 80% of Delta’s US fuel needs, the airline said.
The acquisition will allow Delta to reduce its fuel expense by $300 million annually and ensure jet fuel availability in the Northeast.
Delta said BP will supply oil to the refinery under a 3-year agreement, and that gasoline and other products will be exchanged with BP and Phillips 66 elsewhere in the US under multiyear agreements. It said Monroe expects to close the acquisition by the end of June and complete changes at the plant to produce more jet fuel by the end of the third quarter.