BP completes construction on refinery project

2013-12-18T10:50:00Z 2014-04-29T14:26:12Z BP completes construction on refinery projectJoseph S. Pete joseph.pete@nwi.com, (219) 933-3316 nwitimes.com
December 18, 2013 10:50 am  • 

After billions in investment and years of construction that brought thousands of workers to the BP Whiting Refinery, the energy company has marked the final major milestone of its $4.2 billion upgrade to its Whiting facility.

BP has started up its new state-of-the-art coker, a processing unit that converts residual crude oil into gas oils that are used in gasoline, and into petroleum coke that is used overseas in energy production. The 102,000-barrel-per-day coker was the last of the major new units installed at the BP Whiting Refinery during the massive modernization project aimed at letting it process more of the heavier Canadian crude oil.

"The safe start-up of this world-scale coker is the last major step in unlocking the full potential of the Whiting refinery for our shareholders," said Iain Conn, chief executive of BP's downstream segment. "The reconfigured refinery now has the flexibility to greatly increase heavy sour crude processing, delivering an expected incremental $1 billion in operating cash flow per year, depending on market conditions."

As many as 14,000 skilled tradesman worked at the refinery during the height of the project, which is greater than the population of Whiting. Only a few specialists remain on site.

All the construction work is done, BP spokesman Scott Dean said. The refinery is still working through post-start-up troubleshooting, but BP expects to be able to ramp up its processing of Canadian crude oil between the end of the year through the first three months of next year.

The massive refinery that runs along the Lake Michigan shoreline in Whiting, Hammond and East Chicago has been converted to go from mainly processing light, sweet oil to the heavier crude oils from the Dakotas and Canada, where production has been booming.

"The Whiting Refinery project has been at the heart of our U.S. fuels strategy to operate sophisticated, feedstock-advantaged refineries tied to strong logistics and integrated into fuels marketing," Conn said. "This world-class refinery is in the right location with the right equipment to process growing supplies of North American crude oil, including heavy grades from Canada."

The $4.2 billion project — the largest private sector investment in Indiana history — included several hundred million dollars in state-of-the-art environmental equipment for water treatment and air emissions, said BP Whiting Refinery manager Nick Spencer. About $400 million in federally mandated pollution controls added to the original $3.8 billion price tag for the project.

"Our investment in Whiting's future shows BP's commitment to safely providing energy and jobs in America," Spencer said.

The refinery employs 1,900 workers, but also spends than $3 billion annually with outside vendors in Indiana and Illinois. The company's economic impact report estimated that — accounting for the ripple effect — BP supports an estimated 60,000 jobs in those two states.

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