Western Refining halts activity at Yorktown refinery
Western Refining is suspending refining operations at its Yorktown refinery due to the poor outlook for East Coast refining margins. Western will continue to operate the Yorktown products terminal and supply the region with finished products. Western said that it if the outlook improves, it would consider restarting refining operations.
A shutdown of the processing units at the refinery will begin immediately and take approximately six weeks to be completed.
"The decision to suspend refining operations at the Yorktown refinery was a difficult, but necessary decision driven by the on-going challenging refining margin environment experienced on the East Coast, the continued low price differentials between light/heavy crudes, and poor coking economics,” said Jeff Stevens, president of Western Refining. “This was a market-driven decision and is not a reflection of the commitment of our Yorktown employees to run a safe and reliable operation. Western is committed to treating them fairly and with respect as we work through this transition."
As a result of this decision, the Company will record a one-time cash charge totaling approximately $13 million during the second half of 2010.
Illustrating the difference geography makes within the US, Western seems to be happy with the margin performance of its refineries in the Southwest.
"We are pleased with our second quarter results, which reflect improved refining margins and continued gains as a result of our cost savings initiatives,” Mr. Stephens said. “Our Southwest refineries operated well and took advantage of the margin environment which showed improvement from the first quarter of the year and the second quarter of 2009.”
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