About 1,100 unionized workers at two Sunoco Inc. (SUN) refineries in Pennsylvania may strike this weekend if an agreement on a labor contract isn't reached, according to the company and the United Steel Workers union.

"I've authorized a strike at both refineries at noon Sunday," said USW International Vice President Gary Beevers. There is no chance for a contract extension if an agreement isn't made, said Beevers, who is in charge of negotiations for the union.

The dispute isn't over pay but over possible layoffs at the refineries.

The company has offered an annual 3% raise and a $2,500 bonus upon ratification of the three-year contract, Golembeski said. This is similar to a contract that the union negotiated on a national level for nearly 24,000 refinery and chemical plant employees workers across the country.

"We have made a very strong offer that we believe is consistent with the industry pattern," said company spokesman Thomas Golembeski.

However, Beevers said the union can't agree to language Sunoco added to the contract about layoffs. Sunoco has hinted at cutting about 111 jobs at its Philadelphia refinery but then backed off that number, said Beevers.

"I don't think they know what they really want to do," he said.

Golembeski said the cutbacks would be voluntary and that the company is offering a buy-out package.

There is nothing about "involuntary layoffs" in the contract, Golembeski said.

Sunoco is the only refiner that hasn't reached an agreement with labor at some of its plants. It did reach at agreement at its Toledo, Ohio, refinery. The two sides will be meeting throughout the weekend to try to carve out a deal.

The Philadelphia refinery has a capacity of 335,000 barrels a day and the Marcus Hook, Pa., plant can run up to 178,000 barrels a day.

-By Susan Daker, Dow Jones Newswires; (713) 547-9208; susan.daker@dowjones.com