High gas prices got you down? Here’s an over-the-top solution: Buy your own refinery.
The Somerset Refinery is going on the auction block.
Premium content for only $0.99
For the most comprehensive local coverage, subscribe today.
The successful bidder can put 5,500 barrels of crude in one end and get gasoline, kerosene, diesel, grease and other products from the other.
”With record crude prices and energy independence on the line, the lucky buyer can expect tremendous return on investment ... for decades to come,“ says a press release from Edward Durnil, the court-appointed auctioneer at Tranzon Asset Advisors.
Refinery sales are rare, so Durnil doesn’t know what this one might bring.
”I’ve heard estimates everywhere from $5 million to $6 million to ‘the sky’s the limit,’“ he said.
The refinery auction, which will take place next month, is being advertised around the world. As important as the refinery itself is its permit, Durnil said.
”That’s not an easy thing to get in the United States these days,“ he said.
The refinery is being sold as part of a bankruptcy proceeding that began in May 2007.
”There were some cash-flow problems that created a bottleneck in paying crude suppliers,“ said Ellen Arvin Kennedy, the attorney for the trustee in the case.
The Somerset Refinery is one of 149 refineries in the United states. The only other refinery in Kentucky is operated by Marathon. It’s in Catlettsburg.
As refineries go, Somerset ”is certainly on the small scale,“ said Steve Higley of the National Petrochemical & Refiners Association.
It wasn’t clear Friday just how old the Somerset Refinery is.
Cy Waddle worked there from 1949 to 1999 and was part owner the last 36 of those years. He said Friday that the refinery probably started operations in 1932 or 1933.
The refinery gets most of its oil from small and midsize oil wells in Eastern Kentucky and Tennessee. Most oil is trucked to the refinery, but a new rail park means crude could be brought in on in tanker cars soon, Durnil said.
Other property of the refinery company will be auctioned separately. It includes more than 100 vehicles, including tankers and semis, refined oil stored in a warehouse, a dozen gas stations in towns around the region, and offices and a warehouse.
Getting the refinery operating again is very important to the area, said Carrol Estes, executive director of the Somerset-Pulaski Development Foundation.
The refinery employed 178 people, some of whom are still available to go back to work, and it generated a number of other jobs, Estes said.
”We will be at the auction,“ he said. ”Whoever is there, we’re going to ... tell them we have some incentives if they put it back in operation.“