Good evening,
About a decade and a half ago, proud Texas refiner Valero announced plans to shut down and take the wrecking ball to the Delaware City refinery.
The company reported losing a staggering $1 million a day at Delaware City during the deep recession of 2008 and 2009. At first, there were no takers for the half-century-old refinery.
Then came start-up, PBF Energy, which knew a thing or two about the refinery since its team came out of the ranks of a previous owner. The company, with the help of private equity and state assistance, bought the refinery for more than $200 million and engineered a quick turnaround, assisted by a slow but steady economic recovery.
It appears that while regarded as a well-run company, Valero never got a handle on operating a refinery that rates high on a complexity scale that measures the ability to handle various types of crude oil.
About a decade later, the Port of Wilmington saw perhaps the biggest change in its nearly 100-year history, followed by new owner issues seen earlier at the refinery downriver.
The state turned over the port to Gulftainer, a company based in the United Arab Emirates. An earlier effort to privatize the port failed after the interested operator faced opposition from the longshoremen’s union and shippers.
The 50-year lease freed the state from underwriting port losses and paved the way for badly needed capital investments undertaken by Gulftainer. Gulftainer vowed to develop a container port on the Delaware River at the former Edgemoor DuPont titanium plant site, potentially bringing hundreds of precious blue-collar jobs to the state.
It did not take long before reports of labor and legal troubles trickled in with no signs of progress in developing the Delaware River container port. The state remained tightlipped on the matter.
Then came the Covid-19 pandemic. The port snapped back with record tonnage, but reports of financial and environmental issues continued via a long-running watchdog effort by the News Journal/Delaware Online. We also learned that the state quietly provided relief on lease payments.
Still, it was a surprise when a Massachusetts-based company Enstructure was quietly selected to run the port.
Enstructure can hit the ground running since it already owns a key contractor at the port.
Despite growing concerns that the Edgemoor port might be a risky bet in a crowded Delaware River market, Enstructure vowed to do its best to develop the Edgemoor site.
Interestingly enough, the change has not been formally announced.
It’s hard to say what will happen next as we move into a slower economy and sharply higher interest rates that will raise the price tag for the new port.
Perhaps a bare-bones Edgemoor port might be a good alternative if permitting and other concerns can be addressed. (I’m no expert on such things). The site remains forlorn, with the departure and demolition of the IKO roofing materials plant adding to the post-industrial scene.
IKO, meanwhile, expanded to a site out of state. Edgemoor was not an option unless the state offered acreage from the former titanium site.
Stay tuned. More details will emerge. – Doug Rainey, chief content officer.
