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Flood might cost refiner $125 million
By Staff and Wire Reports
Published:
9/8/2007 2:48 AM
Last Modified: 9/8/2007 2:48 AM
Coffeyville Resources LLC says repairs to its refinery in Coffeyville, Kan., and cleanup from a July flood may cost as much as $125 million.
Repairs to oil-refining equipment cost $81 million, Coffeyville Resources said in a regulatory filing. Repairs at a fertilizer mill attached to the refinery cost $4 million, the filing said.
The refinery -- about 65 miles north of Tulsa -- was shut for more than seven weeks after the Verdigris River topped its banks July 1 and swamped the 101-year-old plant. Crude oil spilled from a storage tank, mixing with floodwater that destroyed 300 homes in Coffeyville.
Cleaning up the oil is expected to cost $7 million to $10 million, the company filing said. The cleanup will probably be finished by the end of December.
Payments to cover damage to homes and other neighboring properties may cost $25 million to $30 million, the company said.
Coffeyville Resources -- based in Sugar Land, Texas, and owned by Goldman Sachs Capital Partners and the buyout firm Kelso & Co. -- said it can't estimate how much it may be required to pay in environmental penalties.
Before the flood, the 101-year-old plant produced 2.1 million gallons of gasoline and 1.7 million gallons of diesel and similar fuels a day.
Goldman Sachs and Kelso plan to sell a 19 percent stake in Coffeyville Resources for as much as $375 million, according to the filing. The firms bought the refinery and fertilizer
mill in June 2005 from Pegasus Capital Advisors LP for $727 million.
In another matter, Coffeyville Resources said a disruption occurred Thursday at the refinery when a nitrogen fertilizer unit lost air, causing flaring -- the burning of chemicals into the air.
"We lost air products to our nitrogen fertilizer facility. That caused a ripple effect into the refinery," company spokesman Steve Eames told Bloomberg News in a telephone interview. "Everything is up and running."
Non-essential personnel were "briefly" evacuated, Eames said.
He declined to say if the disruption affected production.
The Tulsa World Business staff contributed to this report by Bloomberg News.
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