Alon Refinery Fire Under Investigation

Alon USA Energy Inc. said today that all but one of the four workers injured in Monday’s explosion were released from the hospital yesterday. The one remaining employee is being treated for burns and he is believed to be in stable condition.

The cause of the explosion, which occurred in the area around the propylene splitter unit, has not yet been determined. However, the fire has been extinguished, allowing the investigation to begin as soon as reasonably possible. The extent of the damage is still being evaluated, but an initial assessment showed that the propylene recovery unit was destroyed and equipment in the alkylation and gas concentration units were damaged in the fire.

"We are developing contingency supply plans for our customers and expect to have those in place in the next few days," said Jeff Morris, Alon’s president and CEO. "We are also in the process of developing an operating plan for repairing the facility and bringing the refinery back into operation as soon as possible. Based on our preliminary assessment, our goal is to resume partial operations in approximately two months.

"The company has property damage and business interruption insurance in place which we believe will be adequate to address the damages associated with this incident."

Alon primarily markets gasoline and diesel under the FINA brand name, through a network of approximately 1,200 locations, of which about 300 are company owned. The company is also the largest 7-Eleven licensee in the U.S. through its Southwest Convenience Stores subsidiary. The 70,000-barrel-per-day Big Spring refinery, one of four operated by the company, delivers products to marketers from Ft. Smith, Ark. to Phoenix via company-owned and third-party pipelines. The plant employs approximately 170 people.

Alon acquired ownership of the Big Spring plant in August 2000, when ALON Israel Oil Company Ltd. purchased the U.S. fuels marketing and refining assets of Atofina Petrochemicals Inc. (FINA). The refinery has been in service for more than 75 years.

"The entire board of directors and Alon Israel stand behind the company and its management team and will support them as they take all necessary actions to resume operations at the refinery," said David Wiessman, Alon’s executive chairman and chairman of Alon Israel Oil Co. Ltd, the company’s majority shareholder.


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