Oil refiner and marketer Sunoco Inc. ( ) entered into a partnership with Washington-based The Carlyle Group L.P. ( CG - Snapshot Report ) in an attempt to save the Philadelphia refinery from closing. The deal, pending customary approvals and regulations, is expected to be closed in the third quarter of 2012.

The oldest and largest East Coast refinery, which was struggling to generate profits amidst the rising crude oil price scenario, was slated for closure in August. Three months back, in April, Sunoco announced its decision to enter into talks with the Carlyle Group regarding the refinery.

Per the terms of the newly signed joint venture – Philadelphia Energy Solutions – Carlyle will put in an undisclosed amount of money in the refinery that has a processing capacity of 330,000 barrels of oil per day. Carlyle will control the majority stake of the partnership and will take care of the daily operations of the refinery. On the other hand, Sunoco will hold a non-operating minority interest by contributing its Philadelphia refinery assets to the partnership.

This joint venture will not only retain the current 850 jobs, but will also open doors to almost 100–200 new, permanent employment opportunities. The partnership will also work toward capturing other major projects capitalizing on the ample supply of natural gas in the Marcellus Shale.

To tap the high-quality, low-sulfur crude oil of the Bakken formation in North Dakota, Carlyle plans to set up a train-unloading terminal at the refinery that could process 140,000 barrels of oil per day.

This partnership comes as a positive move for Sunoco, which was facing heavy losses from the Philadelphia refinery along with the other minor and now-shuttered Marcus Hook facility.

The Philadelphia refinery plays an important role for the energy center in the Northeast and is expected to serve the adjoining regional markets via its new developed business infrastructure and renovated crude oil sourcing network.

Of late, Sunoco has undertaken a number of strategic initiatives to improve its profitability, including its decision to exit its refining business and the impending merger with Energy Transfer Partners L.P. ( ETP - Analyst Report ) .

We believe that apart from providing a hefty premium to Sunoco’s shareholders, the merger will also broaden the scale and geographic reach of the company’s logistics and retail businesses.

Sunoco currently retains a Zacks #3 Rank, which translates into a short-term Hold rating.