Buckeye’s plan is driven by changing dynamics in crude oil markets—while supplies are tight on the East Coast, a glut of oil exists in the western United States thanks in part to increased production of "Bakken’’ shale oil from Montana, the Dakotas and Canada. That makes it profitable for Buckeye to transport crude Bakken shale oil by train, and other oil supplies by boat from a hub in the Bahamas.
"We expect to spend approximately $200 million to $225 million of growth capital at Perth Amboy over the next three years to modernize the facility, transform it into a highly efficient multiproduct storage, blending and throughput facility," said Clark Smith, Buckeye’s CEO, on a recent earnings call
High crude prices in the Northeast had prompted recent refinery sales including that of Philadelphia-area facility Trainer bought by Delta Airlines. Some analysts said unless it imported cheaper oil by train or boat, Delta would be hard pressed to make money.
But now Buckeye is exploring the option of importing Bakken crude by train at the behest of several unidentified customers.
The company’s management is keeping an eye on the jet fuel market as it also considers expanding pipelines to John F. Kennedy International Airport in the future, according to an investor presentation this spring.
|Quoting Pellegrine (Reply 3):|
This whole business is a joke to me. There is a reason for NE refineries going idle and being put into shutdown mode. That airlines are eyeing them now is beyond a joke.
|Quoting Pellegrine (Reply 3):|
There is a reason for NE refineries going idle and being put into shutdown mode. That airlines are eyeing them now is beyond a joke.
|Quoting burnsie28 (Reply 7):|
DL has already stated they would be getting oil from Bakken.
|Quoting WDBRR (Reply 6):|
Wouldn't fuel prices go up with less
refining facilities to keep up with demand?
Thought the airlines would want to keep
their fuel costs down.
|Quoting tommy767 (Reply 12):|
I don't think UA would want to deal with all the NJ taxes that would be thrown upon them if they owned a refinery.
|Quoting TWA772LR (Reply 14):|
Sounds like a stupid question but, why wouldn't UA buy a refinery in Houston? You know, the oil capital of the western hemisphere and location of their largest hub? I'm sure there are a few unused refineries in the area... Also with the taxes previous posters have stated, wouldn't the Texas taxes on oil and gas be lower?
|Quoting kgaiflyer (Reply 1):|
If this is the Hess refinery that's visible from the NJ Turnpike, it is fairly elderly. I imagine keeping it maintained and running efficiently would be fairly expensive. I don't see how refining "Jet A" and selling nothing else would lead to anything but losses.
|Quoting solarflyer22 (Reply 15):|
You need a relatively small one for Jet A otherwise, you are kind of stuck being both a refiner and a airline.
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