Production is scheduled to restart this fall at a central Kentucky oil refinery that has spent much of the last few years offline because of a management dispute and bankruptcy.
New York entrepreneur Demetrios Haseotes bought Continental Refining Co. in Somerset in December. Haseotes told the Lexington Herald-Leader (bit.ly/RDbl0R) that only the flare system used to burn off excess gases had to be replaced.
The plant opened in the 1930s as a market for crude oil producers in Kentucky and Tennessee. It went into bankruptcy in 2007. Haseotes recently announced a deal for Sunoco to supply crude oil to the plant.
If not for that work, the plant probably would have been ready to go by mid-September, he said. The goal is to have the plant turning out gasoline, diesel fuel, kerosene and other products by early fall, Haseotes said.
The refinery is one of only two in Kentucky can process 5,500 barrels of oil a day. Marathon Petroleum Corp. operates the other facility at Catlettsburg.
That pales beside Marathon Petroleum Corp.’s facility in Catlettsburg, which is rated at 233,000 barrels a day. However, Haseotes said the capacity of the Somerset plant probably could be doubled. He said there is a question whether it would be better to boost the plant’s production capacity generally, or just that of certain fuels.
Either way, he said, he’s not looking for a quick cash-out on the refinery.
“My goal is the long term,” he said.
There are 27 employees at the plant now, but that number is projected to grow to more than 40, said Missy Shorey, a spokeswoman for the plant. The refinery now operates under the name Continental Refining Co.
In 2006, the refinery ran into financial trouble because the price of crude oil went up significantly, owners said later in a court document. Suppliers sued, claiming the refinery had failed to pay for millions of dollars in crude oil.
The principal owners, Frank Lynch and Roy Shirley, sold the company to William Spears, who had a background in the coal industry, but Spears filed for bankruptcy soon after in 2007. A bankruptcy judge ultimately decided the refinery should be sold at auction.
New York real-estate executive Michael Grunberg bought the business in September 2008 for a total of about $2.4 million. Grunberg got the refinery up and running in 2009 but closed it in February 2010. The refinery could not get a sufficient supply of crude oil, officials said at the time.
Haseotes recently announced a deal for Sunoco to supply crude oil to the plant, which is near a large rail-loading facility. However, he also has worked to rebuild relations between the refinery and other regional suppliers, joining the Kentucky Oil & Gas Association and speaking at its June meeting.
Haseotes, who has not disclosed what he paid for the refinery, said he also met with one of the larger oil producers that lost money in the bankruptcy.
“I think everyone wants to move forward,” he said.
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Information from: Lexington Herald-Leader, http://www.kentucky.com
