[Travelandtourism] Delta Subsidiary Buys Oil Refinery to Control Fuel Costs

[cheryl echevarria]

Delta Subsidiary Buys Oil Refinery to Control Fuel CostsBy Kate RiceApril 30, 2012 10:36 PMDelta Air Lines’ subsidiary, Monroe Energy LLC, has reached an agreement to buy the Phillips 66 Trainer refinery complex south of Philadelphia as part of an effort to control its fuel costs. The deal, which had been rumored for the past couple of weeks but not confirmed by Delta, includes pipelines and transportation assets that deliver fuel to Delta locations throughout the Northeast, including LaGuardia and JFK airports.Monroeis spending $150 million to buy the refinery, and it will spend $100 million to convert the existing infrastructure to maximize jet fuel production. The refinery should provide 80 percent of Delta’s fuel in the U.S."Acquiring the Trainer refinery is an innovative approach to managing our largest expense," said Richard Anderson, Delta's chief executive officer. "This modest investment, the equivalent of the list price of a new widebody aircraft, will allow Delta to reduce its fuel expense by $300 million annually and ensure jet fuel availability in the Northeast. This strategy is aligned with the moves we have made to build a stronger airline for our shareholders, employees and customers.”Monroeis partnering with leading energy companies to supply crude oil and receive jet fuel in exchange for Trainer's non-jet fuel outputs. Under a three-year agreement, BP will supply the crude oil to be refined at the facility. Monroe Energy will exchange gasoline and other refined products from Trainer for jet fuel from Phillips 66 and BP elsewhere in the country through multi-year agreements.Leading the Way in Independent Travel!

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