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SUNOCO has partnered with private-equity firm the Carlyle Group in a bid to keep one of its oldest and largest refineries operating.

Around 850 jobs will be saved at the company’s 330,000 bbl/d Philadelphia refinery, with up to 200 more created. Carlyle says it will invest an undisclosed amount into the facility, and will take over its day-to-day management from Q3 of this year. Sunoco’s role in the joint venture – named Philadelphia Energy Solutions – will be reduced to a minority, non-operating interest.

“This is the best possible outcome for everyone involved: existing jobs will be saved, new jobs will be created and new business opportunities will be given the chance to develop,” says Sunoco CEO Brian MacDonald.

The troubled refinery had been struggling with the rising cost of oil imports, and had been scheduled to close in August. However, the plant is a major supplier of gasoline and other refined products in the northeastern US, and regional government feared that its closure could cause a spike in prices. As part of the deal, the state of Pennsylvania will receive a series of tax breaks on top of around US$10m in government funding.

Pennsylvania governor Tom Corbett says that the agreement is “testament to what can be accomplished when the public and private sectors work together toward a common goal.”

“The [state’s] support of this venture in conjunction with business, labour and all levels of government will preserve 850 direct jobs and thousands of jobs that rely on this refinery’s active operation,” he adds.

As part of the upgrades, Carlyle will upgrade the refinery’s catalytic cracker and build a mild hydrocracker and a hydrogen plant. It is also looking to take advantage of the massive supply of cheap gas produced in the nearby Marcellus shale.