By MATT BLOIS
The holding company for the Brentwood energy company Delek reported a big boost in first quarter profits compared to the same period last year.
The company also says it won’t join several other energy companies to build a large oil pipeline in Texas.
Delek reported net income of about $149 million in the first quarter, compared to a loss of $40 million during the same period last year.
Those profits were driven in large part by the company’s refining business. The company had access to relatively cheap oil in West Texas where some of its refineries are located. The price of oil worldwide also rose during the first part of 2019.
Oil has been cheap in West Texas because there aren’t enough pipelines to transport the oil to other areas. Several companies are planning to build pipelines to address the need.
In September, Delek announced that it would partner with several energy companies to build a pipeline transporting oil across Texas to the Gulf coast for export. Earlier this year, the company decided to abandon that plan.
“During the first quarter, we exited the proposed PGC Partnership allowing us to explore more favorable options to participate in one of the announced long haul crude oil pipelines,” CEO Uzi Yemin said during a conference call with investors on Monday morning.
As energy companies build pipelines throughout 2019 to reduce the oil bottleneck in West Texas, Yemini said Delek expects oil prices in West Texas to rise. He said in the long term, the company still thinks it’s beneficial to have refineries close to oil production.