Commonwealth Journal

December 26, 2012

Refinery in final stages prior to start up

Production could begin in a few weeks

by Bill Mardis
Commonwealth Journal

Somerset —  

“Really soon ... within the next few weeks.” That’s the day-after-Christmas projection on restart of the former Somerset Refinery.
“We’re in the final stages of the checklist. We’re reviewing all equipment and safety procedures. We are being very thorough,” said Missy Shorey, spokesperson for Continental Refining Company, current owner of the landmark oil refinery off Monticello Street.
“We’re in the final steps of the review,” Shorey reiterated. “(Restart) of the refinery should be soon. I don’t have an exact date ... to give an exact date would be premature.”
Continental Refining Company continues to hire employees. “We have 34 on the payroll now,” Shorey said this week. A total of between 40 and 50 job positions will be filled when the refinery reaches full production.
A ribbon cutting and opening ceremony will be held shortly after the refinery is operational, Shorey said. CRC owner Demetrios Haseotes indicated the ceremony will reflect on the history of the industry and its value to this area.
Somerset Refinery, until it closed nearly three years ago, was one of only two refineries in the state. Marathon Petroleum Corporation operates the other facility, at Catlettsburg.
Somerset Refinery started operations in the 1930s. It provided an important market for small crude oil producers in nearby areas of Kentucky and Tennessee, and its affiliated Somerset Oil stations were once familiar sights in the region.
The refinery in 2006 ran into financial trouble because the price of crude oil went up significantly, owners said later in a court document.
Suppliers sued, claiming the refinery had failed to pay for millions of dollars worth of crude oil. The refinery went through several owners; through allegedly broken promises; through bankruptcy; and through property auctions and was finally shut down in February 2010.
The refinery was purchased a year ago by Continental Refining Company (CRC), and the Somerset-based corporation is in the process of restarting the refinery.
Continental Refining has secured a crude oil supply contract with Sunoco Partners Marketing and Terminals LP that will ensure consistent operations.
The contract with Sunoco will assure CRC between 1,500 and 4,500 barrels of oil a day. CRC continues to work with area producers of oil, some of whom claimed they were not paid by a former owner. CRC is currently advertising for area supplies of crude oil, pointing out the convenience and transportation savings by selling to the Somerset firm.
CRC 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