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Published: Friday, 3/8/2013 - Updated: 1 year ago

$400M gas-processing unit boosts refinery’s operation in Oregon

BY TYREL LINKHORN
BLADE BUSINESS WRITER
Workers and guests gather at BP-Husky Refining LLC in Oregon for a commissioning ceremony for a $400 million gasoline processing unit known there as Reformer 3. The unit went online about a month ago. Workers and guests gather at BP-Husky Refining LLC in Oregon for a commissioning ceremony for a $400 million gasoline processing unit known there as Reformer 3. The unit went online about a month ago.
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BP-Husky Refining LLC officials introduced a $400 million gasoline-processing giant to the public on Thursday, saying the 240-foot-tall addition will greatly enhance the 94-year-old Oregon refinery.

And BP leaders said the work at the local refinery may be just part of a multibillion dollar investment to bring Canadian crude oil to market in the United States.

The unit, dubbed Reformer 3, went online in early February and is fully operational. It will make the refinery more efficient and slightly boost the amount of fuel produced, according to the company, which invited media and local officials to see it on Thursday.

The unit takes low-octane gasoline — produced from crude oil at another part of the refinery — and rearranges the molecules to make a much higher-grade gas that can be blended for use in cars and trucks.

“This really provides a platform for us to be competitive moving forward,” said Mark Dangler, president of BP-Husky refining and the refinery manager. “It makes more gasoline from the same amount of crude as well as more hydrogen we can use in other parts of the refinery. On many fronts, it makes this facility more competitive.”

The new reformer replaces three units built in the 1950s and 1960s. Construction took about two years and created some 1,500 temporary jobs for construction workers, who put in about 1.5 million hours of work.

Officials say the new unit can produce 3 percent more gasoline from the same amount of crude oil.

“Whenever you can do the same thing with one unit versus three, it makes the facility much more competitive, more energy-efficient, and overall really sets up the facility to be a competitive refinery for decades to come,” Mr. Dangler said.

Workers and guests applaud after the ceremonial ribbon-cutting for Reformer 3. The unit takes low-octane gasoline — produced from crude oil at another part of the refinery — and rearranges the molecules to make a much higher-grade gas that can be blended for use in cars and trucks. Workers and guests applaud after the ceremonial ribbon-cutting for Reformer 3. The unit takes low-octane gasoline — produced from crude oil at another part of the refinery — and rearranges the molecules to make a much higher-grade gas that can be blended for use in cars and trucks.
THE BLADE/DAVE ZAPOTOSKY Enlarge | Buy This Photo

The new unit also will reduce the refinery’s air emissions by 5 percent, continuing an effort that has seen refinery emissions drop by 45 percent since 2000.

The added hydrogen produced can be used in other processes throughout the refinery. Refiners can use hydrogen to reduce sulfur content in crude oil, making it cleaner.

The BP-Husky refinery primarily gets crude oil piped in from Canada. The raw crude is processed into a form of low-octane gasoline before it gets to the new unit, which is a catalytic reformer.

“We upgrade the quality of that gasoline with this unit,” Mr. Dangler explained. “The gasoline in crude oil has an octane of about 60. What you buy at the pump is anywhere from upper 80s to low 90s. This unit will make 100 octane gasoline, which then we can use to blend and make great finished product.”

The unit is designed to produce 42,000 barrels of gasoline a day. Officials say the Oregon refinery — a 50-50 joint venture between BP and Husky Energy — can process up to 160,000 barrels of crude oil per day. In addition to gasoline, the refinery produces jet fuel, diesel, several fuel gases, pet coke, sulfur, and asphalt.

BP sold two of its five U.S. refineries in 2012, and has placed its focus on its facilities in Cherry Point, Wash., Whiting, Ind., and Oregon.

“We feel like this is really the right place to invest in the United States. We feel like the Midwest has got a competitive advantage,” said Doug Sparkman, president of BP’s East of Rockies fuels business.

Mr. Sparkman said the new reformer helps keep the Oregon refinery on the cutting edge, and he’s hopeful for more capital investments.

“We’re not really here to talk about what we’re going to do, but we are actively working on the next series of investments,” he said.

With crude from the Utica Shale in eastern Ohio, Pennsylvania, New York, and West Virginia coming on, and access to Canadian crude, Ohio is especially well positioned.

Mr. Sparkman said BP has the flexibility to work with different types and grades of crude, and the company aims to be more flexible.

“That’s our next strategy, our next question,” he said. “How do we really increase the flexibility of what we can handle?”

BP and Husky said about four years ago, they planned to invest billions of dollars into development of vast Canadian oil sands fields. That would include investment both in the fields and in Oregon to equip the facility to process those heavy bitumen reserves.

Economic changes have delayed much of that investment, but officials say the companies continue evaluating options and that the $400 million investment in Oregon celebrated Thursday will be part of a multibillion-dollar investment in the project.

The BP-Husky Refinery employs about 650 people full time. Depending on the time of year and current projects, the number of contract employees ranges from 500 to 1,000.

Contact Tyrel Linkhorn at: tlinkhorn@theblade.com or 419-724-6134.



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