Aug. 14–PBF Energy said it may use part of $291 million it expects to raise in a stock offering to restart a coker at its Chalmette refinery.
The coker unit within the refinery was shuttered by previous owners in the wake of the recession and been idle for nearly a decade. If it moves forward with the Louisiana project, PBF Energy will refurbish the coker to safe operating condition with new equipment and bring it in line with current regulatory requirements, according to documents filed with the state.
The Chalmette refinery can process about 190,000 barrels of crude oil per day and produces gasoline, diesel, benzene and other products.
The firm has eyed a restart to the coker and a hydrocracking unit since 2015 when it acquired the refinery, according to Reuters.
A notification PBF’s Chalmette subsidiary filed with Louisiana Economic Development in June said the coker project would cost $108.4 million, and would create 27 new jobs and 100 construction jobs. Advance notices are filed by companies seeking tax breaks through LED.
The company also filed a notification for a potential $503.2 million worth of “upgrades to refinery.” A PBF spokesman did not return calls seeking comment.
LED Secretary Don Pierson said the agency has been in contact with the Louisiana subsidiary to make sure the company is aware of the state’s interest in the proposed projects.
“We are doing everything we can to keep refineries and the chemical manufacturing sector of our economy strong and viable,” Pierson said in a statement. “Chalmette Refinery’s applications for incentives are newly filed and indicate the company’s intention to seek benefits under the Enterprise Zone and Industrial Tax Exemption programs.”
Between the two projects, the company would retain 570 existing jobs and create 32 new direct jobs, along with 300 construction jobs, Pierson said.
PBF already has invested about $100 million in improvement projects at the Chalmette refinery, according to an investor presentation. Those included restarting an idled reformer, hydrotreater and light-ends recovery plant.
In an earnings call earlier this month, PBF CEO Thomas Nimbley said the company has “shifted (its) optimization focus full time into Chalmette” because of the opportunities at the facility. Nimbley also said in a first-quarter earnings call that restarting the coker would be a “very good economic project,’ according to a transcript from Seeking Alpha.
The project fits into a regulation by the International Marine Organization that reduces the limit of sulfur content in marine fuels starting in 2020, according to Zacks.
ExxonMobil and the state oil company of Venezuela ran the Chalmette refinery until 2015, when the group sold the facilities to PBF Energy out of New Jersey for $322 million. PBF is one of the largest independent refiners in the country, and the Chalmette property increased the company’s refining capacity by 35 percent.
Nimbley called that joint venture between ExxonMobil and Venezuela a “broken marriage” and said the group didn’t invest a lot of money into the plant, which left PBF with a list of opportunities for investments. PBF already has restarted some of the units the previous owners shut down.
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