Western Refining suspending most operations at Yorktown plant



Posted on August 5, 2010 at 10:28 AM

Updated Thursday, Aug 5 at 6:06 PM

YORKTOWN -- Western Refining is suspending refining operations at its Yorktown refinery, affecting as many as 230 employees who received notice today.

Western officials said the company will continue to operate the Yorktown products terminal and supply the region with finished products with the rest of the staff -- about 30-40 workers .

Company officials said Thursday the decision is due to the poor outlook for East Coast refining margins.

In a press release, President and CEO Jeff Stevens stated, "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. 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."

He said the company would consider restarting refining operations if the situation improves.

Shutdown of the processing units at the refinery will begin immediately and will take about six weeks to complete.

"The price of crude oil is the problem right now. It is awful high," said spokesman Joe DiNapoli.

He said oil supply likely won't be affected because Western Refining will still operate its terminal on-site and bring in crude via barge and the Colonial Pipeline.

DiNapoli admitted the cost of gas in Hampton Roads could go up "a couple of pennies."

The company says the Yorktown refinery lost $60 million the past four quarters. The shutdown is estimated to save between $100 million and $120 million.

Rep. Rob Wittman (R-1st District) said, "Today’s announcement hits home for many families in the Yorktown area, as they grapple with news of lost jobs. This is an unfortunate sign that our economy still struggles, and underlines the country’s need for a comprehensive energy policy. Regulatory uncertainty because of cap and trade certainly plays a role, and unfortunately, today only emphasizes the country’s unhealthy reliance on foreign oil. Today, I sympathize for the families affected by the Yorktown Refinery announcement, and assure them that I will continue to support policies that will create an atmosphere for growth, innovation and job creation, as well as a comprehensive, all-of-the-above energy policy."

All of the crude oil supplied to the refinery is delivered by barge directly to the dock.

Western Refining is an independent oil refiner and marketer headquartered in El Paso, Texas.