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Topic: How is the Delta Refinery Doing?
Username: bobnwa
Posted 2013-09-13 09:13:36 and read 7853 times.

Can any of the insiders at Delta bring me up date regarding the oil refinery it bought .
Is it up and operating?
Is it profitabel for Delta?
Is it saving Delta money on fuel purchases?

I have not seen an update for many months.

Topic: How is the Delta Refinery Doing?
Username: RDH3E
Posted 2013-09-13 09:21:36 and read 7806 times.

Quoting bobnwa (Thread starter):
I have not seen an update for many months.

They provide an update with their quarterly results. As of last quarter it was up and running, but losing money.

As of 2Q13: http://www.delta.com/content/dam/del...-financial/JuneQuarterNonGAAPs.pdf

It says Trainer cost them $51M, increasing their fuel costs about 5 cents per gallon.

[Edited 2013-09-13 09:24:06]

Topic: How is the Delta Refinery Doing?
Username: stxbohn
Posted 2013-09-13 10:19:58 and read 7514 times.

Very much up and running providing hydrocarbon products to the northeast out of more and more crude by train from domestic production.

Topic: RE: How Is The Delta Refinery Doing?
Username: bobnwa
Posted 2013-09-13 13:56:45 and read 6976 times.

Quoting stxbohn (Reply 2):
Very much up and running providing hydrocarbon products to the northeast out of more and more crude by train from domestic production.

Is it profitable for Delta? That is the important question.

Topic: RE: How Is The Delta Refinery Doing?
Username: mcg
Posted 2013-09-13 14:30:17 and read 6841 times.

The refinery has not been profitable for DL.

Topic: RE: How Is The Delta Refinery Doing?
Username: Alnicocunife
Posted 2013-09-13 14:52:44 and read 6735 times.

Quoting mcg (Reply 4):
The refinery has not been profitable for DL.

But Delta has been profitable from the refinery. Because it has fuel buying power it has more leverage to purchase fuel at a lower cost. Not just refined fuel from Trainer but almost everywhere in the USA.

Topic: RE: How Is The Delta Refinery Doing?
Username: canoecarrier
Posted 2013-09-13 15:02:33 and read 6676 times.

Quoting Alnicocunife (Reply 5):
But Delta has been profitable from the refinery. Because it has fuel buying power it has more leverage to purchase fuel at a lower cost.

Are you saying they have more raw crude buying power because of the purchase of the refinery? Or, that they can purchase finished product at a discount now due to the negotiating power they have after purchase of the refinery?

Topic: RE: How Is The Delta Refinery Doing?
Username: wjcandee
Posted 2013-09-13 15:25:12 and read 6569 times.

The economics of the refinery are complicated. Operating it may have cost $51 million over income from it, but that's not the whole story.

First, it provides competition against what was an oligopoly of refiners. By refusing to tacitly-collude with them on both the volume of Jet-A made from a barrel of crude, and by lowering the crack spread on Jet-A, Delta helps itself in ways not measurable as precisely as one might think. Also, by switching feedstock to Baaken crude, the refinery may have plugged into a great long-term source of lower-priced crude.

It's like adding Airtran (pre-WN) to the market. The three carriers in there were technically-competing, but nobody was rocking the boat on fares. Enter Airtran, and overall fares declined as real competition entered. Same thing in some sense with this refinery. It's an asset with great potential that they will tweak and tweak and tweak, and I have no doubt they will figure it out.

I think this quotation from the article cited below really says it all: "According to Reuters data, at the start of 2012, physical jet fuel in the New York Harbor was trading at a $9 premium to ultra low sulfur diesel. In recent weeks, jet dropped to a $16.25 discount to diesel." With the refinery's output in the marketplace, there was a $25 swing in the price of Jet A relative to (similar) low-sulfur diesel fuel in NY Harbor. http://www.reuters.com/article/2013/...lta-refinery-idUSL2N0E31ZX20130523







[Edited 2013-09-13 15:25:39]

[Edited 2013-09-13 15:33:20]


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