(Bloomberg) -- PBF Energy Inc. plans to restore production of some transportation fuels at its Paulsboro, N.J., facility after halting output of refined products in late 2020 when oil consumption was decimated by Covid.
It will take several months to repair equipment needed to restart production units, people familiar with operations say. Among the first units to be restarted as soon as this summer may be the continuous catalytic reformer. Reformers convert low-octane naphtha from crude units into high-octane blendstocks for gasoline.
Higher fuel output is welcome news for consumers in the Northeast, which has become reliant on imports because of a dearth of local production. More than 1 million barrels of production have disappeared from North American since 2020 due to plant closures and conversions to renewable fuels plants. The region lost its largest local supply of fuel when the Philadelphia Energy Solutions refinery exploded in a 2019. Meanwhile, gasoline and diesel prices have surged as demand has rebounded since the worst days of the pandemic.
“The market is a lot more balanced than it used to be, and the U.S. East Coast, which is import dependent, now looks more attractive than it was, say, a few years ago,” Robert Campbell, an analyst at Energy Aspects, said by phone. “The prospect of more refinery closures in Europe amid a push for decarbonization could further tighten supplies and improve margins for coastal refineries such as Paulsboro.”
PBF’s plan to restore fuels production adds to evidence that the company, which was battered last year by solvency concerns amid ballooning debt, is turning the corner. The refiners’ stock has gained 80% over the past six months, outperforming all major rivals.
Meanwhile, PBF’s $668 million in unsecured notes due in 2025 have gained almost 13% so far this year, the most among a group of 59 similar securities issued by U.S. rivals.
PBF, which reports its 4Q 2021 earnings Feb. 10, treats day-to-day refinery operations as business confidential information, spokesman Michael Karlovich said when asked to comment on Paulsboro’s status.
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