Business

New York entrepreneur buys idled Somerset crude-oil refinery

SOMERSET — Deme trios Haseotes, a New York entrepreneur with interests in convenience stores, truck stops and a large dairy, has bought the idled Somerset Energy Refining operation, one of two crude-oil refineries in Kentucky.

Haseotes said he hopes to have the plant back in operation by early summer under the name Continental Refining Co. He did not disclose how much he paid for the refinery but said in a news release he planned to invest $10 million to get the plant running and make improvements.

The previous owner said in early 2010 he hoped to get at least $12 million for the facility and equipment such as tanker trucks.

There are 10 employees at the plant now; that number could grow to 40 to 50. It will be mid-2013 before the plant reaches full capacity, according to a release.

The refinery, operating as Somerset Oil, had produced gasoline and other products since the 1930s before it ran into financial trouble in 2006. The company declared bankruptcy in 2007, touching off a bitter fight over control and finances.

A judge decided the refinery should be sold at auction. New York real-estate executive Michael Grunberg bought the business in September 2008 for about $2.4 million.

The refinery had long provided a market for small crude-oil producers in the region but was not able to keep a sufficient supply of crude and shut down in early 2010.

Officials said some suppliers hadn't been paid under the previous ownership, making them reluctant to deal with the refinery after it emerged from bankruptcy. Also, suppliers had started hauling their crude elsewhere.

Haseotes said that he would work to rebuild the supply from small producers in the region and that a nearby rail-loading facility would allow Continental to bring supplies from farther away.

The other refinery in Kentucky is the Marathon Oil complex in Catlettsburg, which has a capacity of 212,000 barrels a day, according to the company Web site. The capacity at the Somerset plant is 5,500 barrels a day.

Haseotes, whose family lives in upstate New York, is head of Hemisphere Management Corp., which owns more than 30 convenience stores and truck stops from New England to Florida, according to spokeswoman Melissa Shorey.

Haseotes founded Midland Farms Inc. in Menands, N.Y., which distributes dairy and other products in nine states, Shorey said.

Haseotes also is an owner and past director of the Cumberland Group of Companies, which includes Cumberland Farms and Gulf Oil LP. Haseotes' family started Cumberland Farms, which grew from a small dairy operation in the 1930s to include nearly 600 convenience stores in 11 states, according to its Web site.

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