Other crude oil projects
ConocoPhillips has announced plans to improve its ability to process heavy crude, particularly at its Wood River, Ill., and Borger, Texas, refineries, through its oil-sands joint venture with EnCana Corp. And Marathon Oil Corp. recently agree to acquire Canada's Western Oil Sands Inc., which will give it access to more than 300,000 gross acres of oil sands and allow to refine heavy crude at its Midwestern refineries, including in Robinson, Ill.
BP is "100 percent committed" to a $3.8 billion expansion of its Whiting Refinery, an investment that will increase production of gasoline and diesel fuel by 15 percent, officials said Friday.
"A $3 billion investment in one company is extraordinary," said Ted Krauss, project senior manager, during a meeting with The Times Friday. "It's in a class of its own ... All projects of this scale are massive. It's a complicated, challenging undertaking. For BP to choose Whiting is extraordinary."
The "world-scale project" will saturate Northwest Indiana's engineering and supply markets, have a large impact on labor and its apprenticeship programs and provide work for more than 2,000 members of the craft and trade unions during its three years of construction. It will provide continued employment for its 1,700 workers and 1,500 contract employees and -- most importantly -- insure the refinery's future, Krauss said.
"The real issue is sustaining the asset base," he said "The investment sustains the asset going forward. It gives it the capacity to compete in the global market. It makes it a survivor."
Over time, wthout investment, the refinery's value and production would deteriorate, Krauss said.
Plus, the project will help the country reduce its reliance on foreign oil, by allowing it to refine heavy Canadian crude from the sands of Alberta where there is an estimated 1.4-billion-barrel reserve. Currently, 10 percent of the nation's fuel supply is being imported because U.S. refining capacity lags behind the amount consumed, Krauss said.
The Chicago area is especially hard hit by supply disruptions because it is at the end of a long supply line that begins in the oil fields of Texas, New Mexico and Oklahoma and the pipe lined from tankers in the Gulf of Mexico.
BP competitors are engaged in similar projects that will enable them to refine heavy crude and tap Alberta's reserve, Krauss said.
Included in the project is $150 million in upgrades, involving new processing units and new technolgy, for the refinery's waste water treatment plant, which are necessary because heavy crude requires additional treatment for ammonia and suspended solids, he added.
Following treatment, the composition of the refinery's waste water will be "comparable" to the treated water municipalities discharge into the lake, Krauss said.
Stan Sorrels, the Whiting refinery's health, safety, security and environmental manager, said for the past 25 years investments made in the refinery have been for environmental compliance.
"It's at a stage where it needs modernization to be competitive," Sorrels said.
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