Provides history of the refinery, more particulars) By Jessica DiNapoliAug 1 (Reuters) – Philadelphia Energy Options LLC, the proprietor of the biggest U.S. East Coast oil refining advanced, has employed an funding financial institution to help deal with its debt burden, as it struggles with low profit margins, people acquainted with the matter said on Tuesday. The transfer underscores the challenges dealing with some East Coast refineries, which used to get pleasure from a aggressive advantage when oil prices had been excessive because they had been in a position to safe provides cheaply by rail. The crash in oil prices has changed that. Philadelphia Energy Solutions’ latest woes come 5 years after personal fairness agency Carlyle Group LP <CG.O> and Power Transfer Companions LP’s >ETP.N> Sunoco Inc rescued the refinery owner from bankruptcy, in a deal supported by tax breaks and grants that saved 1000’s of jobs. The refinery complex is still one of many region’s largest employers, and U.S. power officials have warned that its closure could lead on to price spikes at the pump and even threaten the national security interests. Philadelphia Power Options has tapped investment financial institution PJT Companions Inc >PJT.N> for recommendation on dealing with its near-term debt maturities, together with a $550 million loan that comes due in 2018, mentioned the sources, who spoke on situation of anonymity because the hiring has not been made public. The company additionally has a revolving credit score line that comes due in 2019. “Philadelphia Vitality Solutions is at present assessing its capital construction with the objective of enhancing monetary flexibility in light of present market and regulatory challenges which have affected the company’s profitability,” the corporate mentioned in an announcement to Reuters. “We’re working constructively with our lenders to seek out an answer that may enable us to move forward with the right financial basis to help our business into the long run. Whereas these discussions are ongoing, operations are unaffected and it remains business as normal,” the statement added. The corporate did not touch upon the hiring of an outdoor adviser and PJT Partners and Carlyle declined to remark. Sunoco, meanwhile, didn’t immediately respond to a request for comment. Philadelphia Power Options owns two refineries, Girard Point and Point Breeze. It may well convert roughly 335,000 barrels of crude oil per day to products such as gasoline, jet gasoline and diesel, and it employs about 1,a hundred people. East Coast refiners have decrease profit margins than their peers in different components of the United States, largely due to their present reliance on crude imports from West Africa and other markets. As well as, a lot of them have been struggling with prices imposed by environmental laws, which power them to spend cash on renewable vitality credit. Philadelphia Power Options turned sturdy earnings in 2014 and 2015, thanks to investments in rail terminals that allowed the refiner to usher in discounted Bakken crude oil in mile-long trains from North Dakota. However the boom turned to bust by the end of 2015, as oil prices plummeted and the discount for North Dakota crude disappeared. The fallout hit oil and gasoline explorers and producers laborious, with scores of them equivalent to Linn Power Inc >LNGG.PK> and Breitburn Energy Partners LP >BBEPQ.PK> filing for bankruptcy last yr. Carlyle, which invested $175 million in 2012 in exchange for 2-thirds of Philadelphia Energy Options, withdrew its plans to take the corporate public final yr at an expected valuation of $1.Three billion. Carlyle also tried to sell Philadelphia Power Solutions last 12 months. [nL1N19E2EK] Philadelphia Energy Solutions has additionally been grappling with its labor union, which threatened to strike earlier this summer season until cuts to advantages have been restored. TAX PAYER Help Earlier this yr, a new Jersey-primarily based asphalt refinery, the largest in the United States, closed down, joining 4 other East Coast refineries that shut their doors in the past decade. Before Carlyle took over the complicated, Philadelphia Energy Options was a “zombie” refiner liable to being shuttered within the wake of the monetary crisis, when demand for oil evaporated. In bringing in Carlyle as a majority investor in 2012, Sunoco agreed to contribute to the refinery’s property and be a non-controlling partner. The refinery house owners loved a taxpayer-funded rescue package, which included the creation of a tax-friendly zone, $25 million in grants and environmental liability waivers. The corporate took on the $550 million mortgage that comes due early next yr in 2013 to complete capital projects and pay out dividends to Carlyle and Sunoco. The payouts and tax advances reached $480.9 million between 2013 and 2015, in line with filings.