Global alternative asset manager The Carlyle Group L.P. and Sunoco, Inc. have agreed to form Philadelphia Energy Solutions, a joint venture that will enable the historic Philadelphia refinery to continue operating. The refinery, the oldest continuously operating one on the east coast, processes 330,000 barrels of oil per day into various refined products and was scheduled for shut down in August of 2012. In addition to saving 850 jobs, the joint venture will secure the region’s fuel supply by continuing the daily flow of 10 million gallons of various fuels, and create 100-200 new, permanent jobs, as well as thousands of construction jobs.
Under the terms of the agreement, Sunoco will contribute its Philadelphia refinery assets to the joint venture in exchange for a non-operating minority interest. The Carlyle Group’s investment will transfer directly to the refinery’s balance sheet to fund future capital projects, facility upgrades and boost the refinery’s working capital. Carlyle will hold the majority interest, and oversee day-to-day operations of the joint venture and the refinery. Phil Rinaldi, who has successfully led other refining and chemical business turnarounds, will serve as the CEO of Philadelphia Energy Solutions.