Delta Air Lines agreed to buy a refinery near Philadelphia from ConocoPhillips to offset the risk of higher jet fuel prices. Delta said that it would spend $150m to acquire the Trainer refinery, which has been shuttered for six months, after receiving $30m from the state of Pennsylvania as part of a deal to support job creation. The airline said it would spend $100 million more to refurbish the plant to increase its output of jet fuel.
The company estimate the investment as a modest one, equivalent to the list price of a new wide-body plane like a Boeing 777. The company estimated that it would reduce its annual fuel expense by $300m, once the refinery was refurbished and operating again. To achieve similar fuel savings, Delta would have to buy 60 new-generation narrow-body planes like the Boeing 737, a capital investment that would total $2.5bn.
Delta said it had also struck a three-year agreement with BP to supply crude oil to the refinery.
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