Sunoco, Inc. and global investment manager The Carlyle Group announced a new joint-venture deal enabling continued operation of Sunoco’s 330,000 barrel-per-day (b/d) Philadelphia, Pa. refinery.

The refinery was scheduled for shut down in August of 2012. It will now be known as “Philadelphia Energy Solutions,” according to a joint press statement from the companies.

Under the deal, Sunoco will retain a “non-operating minority interest” while Carlyle will hold the majority interest and oversee day-to-day operations.

“Capital for this investment will come from the Carlyle Equity Opportunity Fund and the Carlyle Energy Mezzanine Opportunities Fund,” according to the companies. “JPMorgan Chase has agreed to provide working capital financing for intermediate products owned by the refinery in the form of an asset-backed loan, subject to documentation.

“Subject to the execution of final agreements, JPMorgan’s physical commodities division, JPMorgan Ventures Energy Corp., will supply the refinery with crude and non-crude feedstocks on a just-in-time basis and will purchase refined products from the refinery for offtake.”

The deal is expected to close in the third quarter of 2012. Financial terms weren’t disclosed.

“The Carlyle Group’s investment will flow directly to the refinery’s balance sheet to fund future capital projects, facility upgrades and enhance the refinery’s working capital,” according to the companies.

Carlyle managing director Rodney Cohen added that “the refinery’s exceptional location and infrastructure will enable the joint venture to create new business opportunities related to Marcellus shale natural gas fields.”

Cat Cracker, Hydrocracker Projects

Meanwhile, the government of Pennsylvania “will invest in several capital intensive projects that are critical to the long-term economic viability of the facility,” according to the companies.

Among the projects:

-- Catalytic-cracker upgrading: The joint venture will “upgrade and refurbish the catalytic cracker, improving reliability and operating performance,” according to the companies;

-- A high-speed train crude-oil unloading facility: This new facility will “provide access to greater quantities of crude oil from North America (versus imported crude), particularly high-quality, low sulfur crude from the Bakken region in North Dakota,” according to the companies; and

-- A mild hydrocracker and hydrogen plant: “By converting the existing middle distillate hydrotreater into a mild hydrocracker and constructing a natural gas-based hydrogen plant, the refinery will produce a more environmentally friendly mix of refined products,” according to the companies.

“The joint venture is also exploring other significant capital projects, including the creation of new businesses based on the availability and abundant levels of natural gas from the Marcellus shale,” according to the company.

Sunoco had threatened to close the refinery because of continuing losses and the poor profitability of many Atlantic Basin refineries. The company earlier closed its 178,000-b/d Marcus Hook, Pa., refinery, for the same reasons.

In similar move – and for the same economic reasons – ConocoPhillips sold its nearby 185,000-b/d Trainer, Pa., refinery to Delta Airlines last month. Delta is converting the refinery to maximum production of kero-jet fuel while minimizing gasoline output.

Sunoco chief executive Brian MacDonald, Carlyle managing director Rodney Cohen, Pennsylvania Gov. Tom Corbett (R) and United Steelworkers union president Leo Gerard all endorsed the deal at the Philadelphia refinery press conference.