(Reuters) - Delta Air Lines Inc (DAL.N) will buy a Pennsylvania oil refinery from ConocoPhillips (COP.N) for $150 million, the first time an airline has bought a refinery, highlighting the industry’s desperate attempt to save money on fuel costs.
Delta said on Monday the refinery would be run by a leadership team headed by Jeffrey Warmann, who last ran Murphy Oil USA’s Meraux, Louisiano refinery. The bid to buy the plant has puzzled analysts who wondered how an airline could succeed at running a refinery that has lost money for experienced energy companies.
Delta said its Monroe Energy LLC unit expects to close the purchase in the first half. Under a three-year agreement as part of the deal, oil major BP (BP.L) will supply crude oil to the plant, while BP and former owners Phillips 66 will get a share of the gasoline, diesel and refined fuel to sell.