Marcellus to the Rescue: Marcus Hook Refinery to Reopen

The Marcus Hook Refinery in the Philadelphia, PA area was closed down in April. Owned by Sunoco, it is one of three refineries in the greater Philly area. A few weeks ago MDN told you about a study that Marcus Hook and Delaware County spent $100,000 on detailing potential uses and markets for the refinery (see this MDN story).

At the time, MDN asked the question if the Marcellus Shale would save the Marcus Hook refinery. Looks like it did. Yesterday, PA Gov. Tom Corbett’s office announced that some of the Marcus Hook Refinery assets have been purchased by Braskem America. Braskem will use it to manufacture polypropylene plastics. The press release says Braskem will secure feedstocks (raw materials) from “multiple sources,” without naming those sources. You can be sure natural gas liquids from the Marcellus and Utica Shale will be a big source—perhaps the main source—for the refinery.

Pennsylvania is kicking in $15 million to make the deal happen. But in return, Braskem must invest $56 million, retain 119 positions (recently laid off), and create 28 new full-time positions.

The governor’s press release announcing the deal:

Governor Tom Corbett today announced that commonwealth support will enable Braskem America to acquire a portion of Sunoco’s Marcus Hook refinery, preserving hundreds of jobs and keeping the company’s operations and North American headquarters in southeast Pennsylvania.

“Braskem could have left Marcus Hook and consolidated its operations to one of the company’s existing plants in Texas or West Virginia, including its U.S. headquarters,” said Corbett. “Our efforts will ensure that Braskem will continue to be a job creating fixture in Pennsylvania for years to come.”

When Sunoco announced it would be closing its Marcus Hook oil refining facility, it put Braskem’s entire Pennsylvania operation, including its Philadelphia headquarters, at risk of moving to a neighboring state or to their plants already located in other states such as Texas.

Braskem’s acquisition of the propylene splitter assets at Sunoco’s Marcus Hook refinery secures a feedstock supply from multiple sources that ensures its continuing operations in Pennsylvania. Braskem will process propylene through the splitter assets for use in its adjacent polypropylene plant. Polypropylene is a thermoplastic polymer used in a wide variety of applications including automotive, housewares, packaging, and textiles.

“This transaction is the result of dedicated efforts of all of the parties involved. I would like to acknowledge the strategic role that Governor Corbett and others in his administration played in making this transaction a reality. It will benefit not only Braskem, our clients and employees, but Marcus Hook and Southeastern Pennsylvania as well,” said Braskem America CEO Fernando Musa. “The acquisition of the splitter reinforces our position as the leader in Polypropylene in the United States and ensures the future of our Marcus Hook operations.”

This successful project impacts the jobs of more than 200 Pennsylvanians including the 119 jobs exclusively tied to their Marcus Hook polypropylene plants, the 90 jobs at their Braskem America Philadelphia headquarters, 10 at their Technology and Innovation Center in Pittsburgh as well as 28 new employees at Marcus Hook.

“This purchase will save manufacturing jobs and it secures the Philadelphia region’s standing as a center of the petrochemical industry,” said Corbett.

Braskem will receive $15 million in state support for the acquisition. Financial support is contingent upon the company investing at least $56 million at the project site, creating at least 28 new full-time jobs and retaining 119 direct and contracted employees for at least five years. Additionally, the company is required to retain 90 jobs at its Philadelphia headquarters and 10 jobs at its Technology and Innovation Center in Pittsburgh.

“When Sunoco announced last year that it would be closing its Marcus Hook refinery, it affected more than the jobs at the refinery,” said Corbett. “Today’s announcement means that Braskem will continue operating and employing more than 200 people across Pennsylvania.”

Gov. Corbett also thanked members of Pennsylvania’s congressional delegation and the General Assembly for their support in moving this project forward. He especially thanked the Delaware County delegation and the Delaware County Council for their partnership in this endeavor.*

*Gov. Tom Corbett (Jul 11, 2012) – Governor Corbett: Braskem America Acquires Portion of Marcus Hook Refinery, Will Keep Operations in PA