United Refining completes deal for N.Y. oil storage
United Refining Co waded further in the U.S. East Coast fuel market on Thursday by completing the purchase of 5 million barrels of fuel storage capacity in deep waters off Long Island, Reuters reports.
Pennsylvania-based United, which owns a small 65,000-barrel-per-day refinery in Warren, Pennsylvania, purchased the Riverhead terminal from Phillips 66 for an undisclosed amount. The deal was first announced on Oct. 9.
Located about 80 miles east of the giant New York Harbor market, the delivery point for the U.S. heating oil and gasoline contract, Riverhead is the only major East Coast deepwater loading and offloading terminal in the region. It can handle Suezmax and Very Large Crude Carrier sized vehicles filled with crude, gasoline, diesel, and heavy fuel.
"The terminal itself is well located strategically," said John Catsimatidis, chairman and chief executive of the Red Apple Group Inc, which owns United.
"Riverhead allows access to high capacity deepwater marine facilities that will give them a cost advantage over other locations."
Catsimatidis had declined to say what United intended to do with the terminal. United, which owns 375 retail fuel outlets in Ohio, Pennsylvania, and New York, did not immediately respond to a request for comment on the deal.
Riverhead currently takes deliveries from ships crossing the Atlantic, stores the fuel and then reloads it onto barges and tankers bound for East Coast destinations, primarily the mid-Atlantic and North Atlantic states, United said. A small amount of heating oil is delivered into eastern Long Island by truck.
United said Riverhead experienced only minor damage from Hurricane Sandy, which shut down most terminals in the New York Harbor area, disrupting trade and chocking off fuel supplies to the region.
Phillips 66 previously said the terminal's sale is part of its strategy to divest assets that do not fit with its long-term business objectives.
Houston, Texas-based Phillips recently sold its 185,000-barrel-per-day refinery in Trainer, Pennsylvania, to Monroe Energy, LLC, a subsidiary of Delta Air Lines Inc.