Delta Refinery Purchase Could Be Imminent
Delta Air Lines could become the owner of a Philadelphia-area oil refinery as early as this week, according to someone familiar with the matter.
The airline is on the verge of finalizing a deal to purchase a ConocoPhillips -owned refinery in Trainer, Penn. for between $100 million and $125 million, says this person and others familiar with the matter.
As part of the deal, J.P. Morganwould purchase crude oil from overseas, ship it to Pennsylvania, and finance the refining process, several of these people say. J.P. Morgan would then sell the resultant jet fuel to Delta at what amounted to a wholesale cost.
In addition, adds one of these people, Conoco would take some of the resultant gasoline and provide Delta with more jet fuel in return.
No official deal has yet been announced and the discussions between Delta and Conoco could still fall apart, say the people familiar with the matter. But Delta, whose board has signed off on the Trainer purchase as a novel way of saving money on jet fuel — which last year cost the company $12 billion — is hopeful the pact could be completed this week.
Spokespeople for Delta and Conoco said they couldn’t comment.
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