Alon enters Phoenix fuels market

OREANDA-NEWS. Alon USA has begun selling fuel into the Phoenix market from its West Texas refinery.

The company plans to ramp up to 5,000 b/d of product into the southern Arizona fuels market that follows southern California pricing. AZRbob, the gasoline blend required for the area, is similar to Carbob.

Alon joins Western Refining's 125,000 b/d refinery in El Paso, Texas, more than 300 miles west of Big Spring, which has long served Arizona fuel supply using a Kinder Morgan products pipeline.

Texas refiners with access to both cheap Permian crudes and product pipelines into the west coast have enjoyed strong margins, especially this year. Planned and unplanned first quarter refinery outages on the US west coast have pulled prices substantially higher than US Gulf coast benchmarks, according to Argus assessments. West Texas refiners can meanwhile easily access WTI-Midland barrels trading at an average \$6.34/bl discount to ANS so far this year, and as low as \$11.465/bl below, according to Argus assessments.

Successful distribution to Arizona could encourage further expansion at the Big Spring refinery currently under engineering review, chief executive Paul Eisman said during a conference call discussing earnings.

"One of the things we've got to figure out as we've gone through the evaluation is how best to place the product," Eisman said. "An example of that is entering into the Phoenix markets."

Alon reported a \$36.5mn profit for the quarter, down from \$42.2mn in the same quarter of 2014.