Krotz Springs Refinery
The Krotz Springs oil refinery in St. Landry Parish, Louisiana, plans to lay off an undisclosed number of plant workers and contractors, Delek U.S. Holdings announced in its earnings call.
Uzi Yemin, CEO of Delek U.S., stated, "Decisive actions are being taken to improve the cash flow profile of our company. This includes an 8 percent reduction in our workforce, 40 percent reduction in CAPEX year-over-year and optimization of operations at the Krotz Springs refinery. The collective impact of these actions, along with a contribution from other initiatives is expected to favorably impact cash flows by approximately $200 million in 2021."
The Krotz Springs refinery, acquired by Delek U.S. in 2017 from Alon Refining, has the capacity to process 80,000 barrels of crude oil each day. It was not clear how much production has been cut since the economic recession began.
Delek U.S. told investors last week it plans to reorganize the business, but still invest $10 million in the Krotz Springs operation during fourth quarter for completion by first-quarter 2021, which is pushing the maintenance and turnaround work back by a few months.
"Depending on market conditions, we have the flexibility to optimize operations at Krotz Springs by operating only the units that are producing favorable margins, thereby reducing unnecessary operating expenses or moving back to full utilization at the facility should macro environment margins improve," Yemin said in a news release.
