PBF Energy will shut most refining units at its Paulsboro, New Jersey, refinery, the company’s chief executive said in a letter to employees.
PBF Energy PBF.N will shut most refining units at its Paulsboro, New Jersey, refinery, the company’s chief executive said in a letter to employees on Wednesday that cited the impact of the coronavirus pandemic on fuel demand.
The company will cut 250 jobs at the refinery, which will now only produce partially refined feedstocks that will be sent to PBF’s nearby Delaware City, Delaware, refinery, CEO Tom Nimbley said in the letter, which was seen by Reuters.
“PBF Energy, along with the entire oil industry, has been significantly, unexpectedly, and negatively impacted from the wellhead to the pump by the COVID-19 pandemic, primarily through demand destruction for transportation fuels related to lockdowns that throttled back the economy,” Nimbley said in the letter. It was sent to employees after the market close on Wednesday.
PBF was not immediately available for comment.
In a 2019 press release, PBF said it had 489 full-time workers at the refinery.
Earlier this year, the Parsippany, N.J.-based company cut spending, laid off employees, sold off hydrogen plants, and suspended its 30-cent a share quarterly dividend to weather the oil downturn caused by the pandemic.
Gasoline refining cracks, or margins, have been weak since the beginning of the pandemic. They are currently $8.46 per barrel, compared with the five-year average of $13.17 a barrel at this time of year, according to Refinitiv Eikon data.
The company was particularly exposed in part due to high levels of debt associated with its $1.2 billion purchase of Shell’s Martinez, California refinery in February.
The 180,000 barrel-per-day Paulsboro refinery is one of just a handful remaining on the East Coast, where a number of facilities have closed in recent years.
Canada’s Come-by-Chance plant in Newfoundland and Labrador has been idled since May in the pandemic. In 2019 the Philadelphia Energy Solutions plant was shut down following an explosion and fire.
Elsewhere, HollyFrontier shut down its Cheyenne, Wyoming refinery, Marathon Petroleum began closing refineries in Martinez, California, and Gallup, New Mexico while Calcasieu Refining idled its Lake Charles refinery in southwest Louisiana.
Phillips 66 announced plans to shut down its Santa Maria refining plant in Arroyo Grande, California, in 2023 and plans to reconfigure its San Francisco Refinery in Rodeo, California, to produce renewable fuels.
The remaining operating refineries operating on the U.S. East Coast include PBF’s Delaware City refinery, Delta Airlines’ refinery in Trainer, Pennsylvania and the 258,500 barrel-per-day Bayway refinery in Linden, New Jersey owned by Phillips 66.
PBF will report third quarter earnings Thursday morning. Its shares closed down more than 8% to $4.27 on Wednesday.
Originally published at Reuters