Phillips 66 is selling there refinery in Plaquemines Parish. This is the refinery that sponsored the CRCL oyster bagging events recently, so there is something good coming out of it. Why are they selling? Market changes and lowered sales. Does the State want to hear that?
Houston-based Phillips 66 wants to sell its Alliance Refinery in Plaquemines Parish, which employs more than 850 workers and contractors. The decision is “in response to market conditions and the evolving energy landscape,” said Allison Stowe, spokesperson for Phillips 66. Operations will continue at the plant while Phillips 66 looks for a buyer, a process is expected to take several months. The 2,400 acre Belle Chasse site has a capacity to process 255,600 barrels of crude oil each day, most of which is refined into gasoline. It was built in 1971. The potential value of the sale could be $500 million, according to U.S. investment bank Tudor Pickering Holt which described the Alliance refinery as its least profitable in the Phillips 66 portfolio because of regional competition.nola.com
The plant has had some up and down relations with money over the past few years.
In 2012, Phillips 66 considered selling the refinery and stalled a planned expansion there, but decided to keep it open. In May, Phillips 66 applied for economic incentives through the state’s Enterprise Zone program and promised $164.2 million of investment to modernize the refinery. The company said the work would create 350 construction jobs. The economic incentives are under review. The work is expected to wrap up by 2023. Phillips 66, the fourth largest U.S. refiner, has a refinery in Westlake with a capacity of 264,000 barrels of oil each day. The Lake Charles refinery was hit by Hurricane Laura last year but damage to the facility was described as “minor”, according to state regulatory filings. The coronavirus pandemic and its related economic slowdown in the past year meant fewer travelers and commuters on the road which lead refineries to feel the pinch.
What people learned from the lock down may, in part, still not bring travel up to prior years levels. Phillips is downsizing.
Royal Dutch Shell is wrapping up the closure of its nearby Convent oil refinery nearby where nearly 700 workers were laid off and hundreds more contractors were let go. Shell attempted to sell the refinery last year but decided to shutter the operation instead.
These three independent actions by three different companies may be the canary in the mine for the oil industry. It might mean that Louisiana will be come less of an “oil” state.