Jul. 3--The Yorktown diesel and gasoline refinery is off the sales block.

After having the refinery on the market for several months, Texas-based Western Refining Inc. is no longer actively seeking a buyer for its operation on the banks of the York River.

Company spokesman Gary Hanson said there had been some interest in the facility, but strained economic and credit markets prevented any potential buyers from making an acceptable offer.

"We said all along it was valuable and we're not going to give it away at fire-sale pricing," Hanson said of the Yorktown Refinery.

The facility is capable of producing about 70,000 barrels of crude oil and other products per day.

In November, company officials confirmed two New York Investment banks had been hired to market the property, which is Western's second largest refinery after one in El Paso, Texas. The sale of the facility was being explored as a way to shore up the company's balance sheet and alleviate some debt.

That move came just more than a year after Western bought the Yorktown operation as part of a move to take over Giant Industries for $1.3 billion. In 2002, Giant paid $170 million for the facility, which sits on 570 acres in Seaford.

As of last November, Western's profits were in a free fall, apparently due largely to a spike in oil prices. But company figures from the first quarter of 2009 indicate that trend has reversed.

Western reported company-wide net earnings of $58.9 million through March 31. Conversely, the company was stung by a net loss of $40 million during the same period in 2008.

In addition to the York plant, Western has refineries in Texas and New Mexico. The Yorktown refinery serves markets in Hampton Roads, Maryland, New York and the Carolinas.

Hanson called the Yorktown refinery a "unique asset" and said improvements made at the facility in recent years have made it more flexible in refining different types of crude oil, which translates into increased profits. It is also one of the most complex and versatile coking refineries on the East Coast, he said. Coking is a process that turns petroleum into a solid residue that burns with intense heat and little smoke.

"Our focus today is on running that asset and reaping the value of it performing well for us," Hanson said, of the Yorktown plant.

About 255 people are employed at the York facility, and that number has remained static for some time, Hanson said.

Of those employees, about 134 are unionized and have a labor contract with Western that runs through 2009.

-----

To see more of the Daily Press, or to subscribe to the newspaper, go to http://www.dailypress.com.

Copyright (c) 2009, Daily Press, Newport News, Va.

Distributed by McClatchy-Tribune Information Services.

For reprints, email tmsreprints@permissionsgroup.com, call 800-374-7985 or 847-635-6550, send a fax to 847-635-6968, or write to The Permissions Group Inc., 1247 Milwaukee Ave., Suite 303, Glenview, IL 60025, USA.

WNR,

A service of YellowBrix, Inc.