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Marcus Hook Refinery Reuse & Revitalization

Marcus Hook Refinery Reuse & Revitalization. Marcus Hook Refinery. 780 acre site, South of Philadelphia Operating refinery and petrochemicals since 1902 Capacity to process 180,000 barrels per day of crude oil Produced 5.5-6 million gallons of transportation fuels per day

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Marcus Hook Refinery Reuse & Revitalization

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  1. Marcus Hook RefineryReuse & Revitalization

  2. Marcus Hook Refinery • 780 acre site, South of Philadelphia • Operating refinery and petrochemicals since 1902 • Capacity to process 180,000 barrels per day of crude oil • Produced 5.5-6 million gallons of transportation fuels per day • 500 direct full time employees, 2.5X indirect FTE’s • Closed and divested petrochemical operation in 2009 • In 2011 Sunoco made decision to close the refinery permanently

  3. Marcus Hook Refinery

  4. Why? • MH Refinery processed light sweet crude oil from West Africa, North Sea, Caspian Region • More expensive feedstock than heavy crude oil from Mexico, Venezuela, Canada, Middle East • Declining transportation fuel demand • Recession and increasing vehicle efficiency standards • Increased competition from non petroleum derived transportation fuels, i.e. RFS2 • Compliance driven investment burden

  5. What do you do with a Closed Refinery? • Most closed refineries become petroleum storage terminals • Refinery tankage and marine infrastructure used to handle imports and supply local markets • Storage terminal employment and economic value added ~10% of a refinery • Hollywood, Hollywood, Hollywood • Old refineries make excellent scene setting for car chases, alien landings, and robot-on-robot violence

  6. Why is Marcus Hook Different? • IHS hired by Delaware County Industrial Development Authority • Evaluate multiple reuse options for the Marcus Hook Refinery and employment / economic value added potential • Can a better use for the facility be identified above the storage terminal default

  7. The Mighty Marcellus • A game changer by any definition • Total U.S. natural gas demand ~ 70 BCF/D

  8. Natural Gas Liquids • With natural gas comes natural gas liquids • Ethane, propane, butane, and pentanes

  9. How Does Marcus Hook Fit • Large amount of onsite storage for petroleum products • Largest underground storage cavern on the East Coast for natural gas liquids storage • Adjacent to Braskem petrochemical plant (natural gas liquids derivatives demand) • Adjacent to Nextera gas fired power plant (natural gas demand) • Existing marine infrastructure and processing equipment

  10. Marcus Hook (Before)

  11. Marcus Hook (Proposed Future)

  12. Redeveloping a Refinery • What does a refinery offer for brownfield redevelopment • Typically have great logistics infrastructure; marine, rail, and road • Industrial facility infrastructure; steam and power generation, nitrogen, compressed air, water, etc. • Liquids storage capacity • Space, most refineries are greater than 500 acres • Greenbelt, many refineries have established buffer zone with local communities

  13. Redevelopment Challenges • Remediation, largest challenge posed for redevelopment • Soil contaminated with hydrocarbons and heavy metals • Lead paint and asbestos insulation • Proximity of refinery to area aquifer • Environmental air quality obligations • Facility decay, once a refinery is taken out of operation, aging happens rapidly

  14. Questions? • James K. Fallon • Director, IHS, Energy Insight • Downstream Research & Consulting • James.Fallon@ihs.com • (832) 209-4452 • Houston, Texas

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