Phillips 66 Plans Los Angeles Refinery Shutdown by 2025

Phillips 66 has announced plans to cease operations at its Los Angeles-area refinery by Q4 2025, impacting around 900 jobs. The company will collaborate with California to manage fuel supply needs, as CEO Mark Lashier highlights uncertainty in long-term refinery sustainability due to market dynamics.

Date: 17-10-2024

AI Rating: 5

Phillips 66's announcement regarding the closure of its Los Angeles-area refinery is significant for a number of reasons. Firstly, the impact on jobs cannot be overlooked; approximately 600 employees and 300 contractors are directly affected. This move could lead to negative public and governmental reactions, potentially influencing investor sentiment.

In terms of operational changes, Phillips 66 has indicated that it will continue supplying gasoline from other sources after the closure of the refinery, which may help alleviate some concerns about immediate fuel supply disruptions. Additionally, the commitment to provide renewable diesel and sustainable aviation fuels from alternative facilities may position the company positively in the eyes of environmentally conscious investors.

CEO Mark Lashier has mentioned the uncertain long-term sustainability of the refinery, which is primarily influenced by market dynamics. This reflects a broader trend within the energy sector, where refiners are increasingly faced with challenges related to profitability and sustainability. Investing in the site development with leading real estate firms indicates a strategic pivot for Phillips 66, potentially leading to new revenue streams.

Stocks: PSX