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RE: Update Sinclair Tulsa Expansion on hold

#6064

Charles Randall
Participant

Sinclair refinery expansion on hold
 
By ROD WALTON World Staff Writer
Published: 7/17/2009  6:44 PM

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The Holly Corp. and Sinclair Oil Co. refineries in west Tulsa both are moving ahead with plans for environmental upgrades, but Sinclairs heralded $1 billion expansion will not happen soon, officials said Friday.
Sinclairs two-year growth project is shelved indefinitely because of external economics, company spokesman John Goodwin said. Giant coke drums shipped from Japan will remain at the Tulsa Port of Catoosa until new work begins.
It hasnt been canceled, but its on hold, Goodwin said.
The refinery will continue with other environmental improvements required by a federal court settlement. Sinclair must spend millions to reduce emissions, according to reports.
Weve done quite a bit of work relative to the environmental compliance, Goodwin said. I think were regularly moving along.
Sinclair Tulsa Refining Co. announced its $1 billion expansion with great fanfare in 2007, saying it planned to increase daily capacity from the current 65,000 barrels, add employees and decrease air pollution. The company has raised its work-force level to about 300 from 200 two years ago and had begun some engineering work before putting the expansion on hold.
The expansion might have provided 1,500 temporary construction jobs as well as having a trickle-down effect on other area businesses.
Holly Corp. says it will begin its $150 million upgrade with some engineering work this year. Construction will begin next year and be completed by mid-2011, company spokesman Neale Hickerson said.
Dallas-based Holly bought the refinery from Sunoco

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Inc., closing the deal June 1. The company paid $65 million for the facility, a price considered well below its potential value.
Embedded within that transaction, however, was an environmental mandate to produce ultra-low-sulfur diesel 15 parts sulfur per million by November 2011. Holly will build a new diesel hydrotreater and sulfur recovery unit, according to reports.
Hickerson stressed that no economic challenges can derail that effort.
Theres no getting around this one, he said.
Philadelphia-based Sunoco was going to shut down the refinery and convert the property into a terminal operation if no buyer was found. The ultra-low-sulfur diesel was mandated in 2006, but Holly got a two-year waiver from the Environmental Protection Agency, Hickerson noted.
Holly employs about 366 people in Tulsa and processes close to 85,000 barrels of crude oil daily into diesel, other transportation fuels and speciality lubricants.
Down the river, Sinclairs Goodwin applauded Hollys commitment, saying he believes both refineries are headed in the right direction.
I think its good for all of us, he said. Theyre a good company, and its good to have them in town.
However, refineries everywhere are feeling the pinch of tougher environmental rules, tight profit margins and volatile crude oil prices.
Its a tough business, Goodwin said.

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