Commonwealth Journal

August 30, 2012

CRC partners with Sunoco for crude oil

by Don White
Commonwealth Journal

Somerset — Continental Refining Company (CRC) announced this week it has secured a crude oil supply contract with Sunoco Partners Marketing and Terminals LP that will ensure consistent operations when the former Somerset Refinery opens next month.

The relationship with Sunoco marks a major milestone for Continental Refining Company because it will eliminate any disruptions in supplies of crude oil, said Missy Shorey, spokesperson for CRC. The Sunoco Logistics Crude Oil Pipeline System consists of approximately 4,900 miles of crude oil trunk pipelines and 500 miles of crude oil gathering pipelines in the southwest and midwest regions of the United States.

“This contract marks an important step in advancement and efficiencies taking place at Continental Refining Company,” said CEO Demetrios Haseotes. “”We are very excited about this relationship because Sunoco Partners Marketing & Terminals LP’s substantial assets and resources provide Continental with a consistent supply of crude oil to the refinery.”

The contract with Sunoco will assure CRC between 1,500 and 4,500 barrels of oil a day, said Shorey, talking Wednesday with the Commonwealth Journal from her mobile telephone in Tampa, Fla. while attending the Republican National Convention.

Somerset Refinery, for many years one of Somerset’s most dependable industries, declined in recent years. It went through several owners; through allegedly broken promises; through bankruptcy; and through property auctions. The refinery was shut down for nearly two years.

Continental Refining Company, a Somerset-based corporation, on December 9, 2011, announced the purchase of Somerset Energy Refining, formerly Somerset Refinery.

Many oil producers in this area diverted production to other refineries prior to Somerset Refinery’s shutdown. They claimed they were not paid by a previous owner. Haseotes has expressed confidence that good relationships can be built with area producers and the local refinery will be a dependable and convenient market for their oil.

“We have reached out to area producers ... we hope to work with them,” said Shorey. Selling their production to CRC will reduce their transportation costs by up to 40 percent,” she said.

When reopened, CRC will be the only oil refinery within a 170-mile radius. Initially, crude oil will arrive at the refinery by trucks but rail, pipeline and barge facilities can be accessed, Shorey indicated.

CRC’s terminal will provide enhanced logistics for clean products in South Central Kentucky and Northern Tennessee. To augment its existing markets, Continental recently secured a contract with Lykins Oil Company, Milford, Ohio, to exclusively market cleaned products. Continental also has established a relationship with Freepoint Commodities LLC, Stamford, Conn., to markets its clean residual fuels, Shorey said.

Continental Refining will produce several products including 87-octane (regular) gasoline, kerosene, diesel, and No. 4 and No. 6 (residual) heating oils. At full capacity, the refinery in a year can produce 23,000,000 gallons of gasoline, 6,000,000 gallons of kerosene, 21,000,000 gallons of diesel fuel and 30,000,000 gallons of heating oils.

A total of between 40 and 50 job positions will be filled when the refinery reaches full production. As of Wednesday, 27 employees were on the payroll at the refinery. An estimated 200 indirect jobs will result from the refinery’s operation, a company official said.

The latest projection to restart to local refinery is mid to late September.