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BusINess » Business » Whiting Refinery’s project start-up delayed until 2013

Whiting Refinery’s project start-up delayed until 2013

A worker builds around the current refinery at BP Whiting Refinery in Whiting, IN, Monday, November 29, 2010. The work is part of BP's $3.8 billion Whiting Refinery Modernization Project. The modernization project will increase the refinery's ability to refine heavier crude oil, including the oil from the Canadian tar sands. This oil contains more impurities than most of the ‘light crude’ oil being refined today. The project is slated to be completed in 2012. (Photograph by Heather Eidson/The Times.)

A worker builds around the current refinery at BP Whiting Refinery in Whiting, IN, Monday, November 29, 2010. The work is part of BP's $3.8 billion Whiting Refinery Modernization Project. The modernization project will increase the refinery's ability to refine heavier crude oil, including the oil from the Canadian tar sands. This oil contains more impurities than most of the ‘light crude’ oil being refined today. The project is slated to be completed in 2012. (Photograph by Heather Eidson/The Times.)

BP PLC is deferring the start of part of its $3.8 billion modernization project at its Whiting Refinery until mid-2013, a company executive said Tuesday. The project was expected to be completed in late 2012.

Iain Conn, chief executive of BP’s refining and marketing division, did not provide a reason for the delay during the company’s conference call after releasing of its fourth-quarter and full-year financial performance.

BP posted a full year loss in 2010 of $3.7 billion, compared to a $16.6 billion profit in 2009.

Conn said the Whiting Refinery modernization project was 60 percent complete and making “good progress.”

Conn said the upgrades at Whiting will allow it to run heavier crude oils and improve its product yields. He said the company also benefits from the refinery’s proximity to Canadian crude sources and pipelines.

“Even at relatively low margins, this project is expected to deliver approximately a three-fold improvement in profitability and will contribute materially to improvement in our U.S. fuel value chain position overall,” Conn said.

BP spokesman Brad Etlin said some components of the modernization will operate on the earlier schedule. He said the reconfigured distillation unit—also called the 12 Pipe Still—is scheduled to operate in the second quarter of 2012. The reconfigured unit will be better designed to process oils including heavy Canadian crude containing more impurities such as sulfur and nitrogen.

However, operation of the new gas oil hydrotreater and petroleum coker will be delayed until mid-2013. The hydrotreater will remove more sulfur and nitrogen from gas oil, and the coker is expected to increase coke and naphtha production.

“Major refinery projects, such as this multibillion-dollar modernization, involve many variables that must all come together just perfectly to meet all planning, construction and commissioning schedules,” Etlin said.

BP officials said Tuesday the company would put its Texas City, Texas, and Carson, Calif., refineries and related marketing businesses up for sale. Despite plans to cut half its refining capacity, Conn said the portfolio after 2013 will provide enough advantages for BP to be competitive in the United States.

The Whiting Refinery is the nation’s sixth-largest, with its 405,000-barrel-per-day refining capacity and will be BP’s largest if Texas City is sold.

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