SOMERSET — A New York real estate magnate has bought the historic Somerset Refinery for $2.2 million and said he wants to have it up and running by early next year, reports the Lexington Herald-Leader in its Saturday edition.
That would begin a new chapter for the refinery. It had been turning crude oil into gasoline for generations before it ran into financial trouble and shut down in late 2006. A bitter fight over the company ensued.
Michael Grunberg, managing principal of Grunberg Realty, will pay a total of $2.42 million, with sales costs, for the parent company of the refinery, which is on 105 acres off U.S. 27 in Somerset, reports the Herald Leader.
The property includes offices, dozens of tanker trucks and other vehicles, a pipeline easement across six counties and 12 Somerset Oil service stations in Southern and Eastern Kentucky. At one time it employed 150 workers.
The refinery can refine an average of 5,500 barrels of oil a day. Buyers from all over the world expressed interest in buying it, the Herald-Leader reports.
Grunberg's company owns and manages commercial and residential buildings, most notably in New York City; Hartford, Conn.; and Scottsdale, Ariz. The refinery is its first foray into Kentucky and the oil business. "In times like these, we wish to diversify," he said.
The Somerset refinery was one of only two in the state. Since it closed, oil producers in Southern Kentucky have faced higher costs to take their product elsewhere, according to John Gabbard, executive director of the Kentucky Oil and Gas Association, which represents producers, the newspaper reports.
Grunberg said he is committed to putting the refinery back into operation. He estimated it would take four or five months to do that.
"The good news is that means jobs," said Edward Durnil, CEO of Tranzon Asset Advisors, which handled the sale of the refinery.
There is a lot of work to do before it can start turning out gas, however, including hiring and training workers, making sure equipment is in good order and re-establishing crude-oil supplies and a market for finished products, said Jan Acrea, vice president of the refinery, reports the newspaper.
Grunberg acknowledged a refinery is a very different kind of property than his company has owned before, but said the business principles are the same. "My interest is to keep things going and to make them profitable," he said.
A skeleton crew of about 20 people has kept up environmental obligations and other work at the refinery since late 2006, reports the Lexington Herald Leader.
Copyright - The Lexington Herald-Leader