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(BN) BP 208-09 Plans Texas City, Whiting, & Rotterdam (Update1)

Home Forums Coking Maintenance Shutdown/Turnaround (BN) BP 208-09 Plans Texas City, Whiting, & Rotterdam (Update1)

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    Charles Randall

    BP Plans Full Texas City Refinery Output Early 2009 (Update1)
    (New York)By Eduard Gismatullin and Nidaa Bakhsh

         July 29, 2008 (Bloomberg) — BP Plc expects to resume full output
    from the Texas City oil refinery, its largest in the U.S., by
    early next year
    after an explosion in 2005 killed 15 workers.
         BP, Europe’s second-biggest oil company, expects to start its
    second residue hydrotreater at the plant in a matter of days,
    bringing the refinery’s processing capacity up to 80 percent
    , Iain
    Conn, the head of BP’s refining and marketing business, said at a
    press conference in London today. It’s “due any day,” he said.
         The improvements come as refining margins, or the profit of
    turning a barrel of oil into fuels, have fallen “substantially
    below” last year’s levels because higher energy costs are hurting
    demand, BP said in an earnings statement today.
         The first residue hydrotreater unit at Texas City started
    production on July 10, and a third unit, a spare, will be brought
    into service in early 2009
    , Conn said.
         BP plans to restart a gasoline reforming unit in the second
    half of this year and the whole refinery should be operating at
    90 to 95 percent of capacity by the end of the year
    , he said. The
    Texas City plant’s capacity is 475,000 barrels a day, according to
    the U.S. Energy Department.
         BP’s Whiting refinery in Indiana, its second-biggest in the
    U.S., has increased production since a fire in April 2007 shut down
    , Conn said. It produced in March its “full clean fuel
    capacity” of 360,000 barrels a day, according to BP’s second-
    quarter earnings report today. The refinery’s overall processing
    capacity exceeds 400,000 barrels a day.
         BP expects to complete a $3.8 billion expansion of the
    Whiting facility by 2012, Conn said.

                          Rotterdam Refinery Expansion

         BP is considering upgrading its Rotterdam refinery in the
    Netherlands by investing in a hydrocracker
    for the production of
    distillates like diesel, Conn said. The refinery investment would
    depend on how “robust” margins will be, he said.
         The Rotterdam refinery can process 400,000 barrels of oil a
    day and is Europe’s second-largest after Royal Dutch Shell Plc’s
    Pernis refinery in the Netherlands.
         “Higher energy costs continue to impact refining earnings,
    more so in the U.S., offsetting the benefits from the continuing
    recovery of our U.S. refining operations and availability,” BP
    said in its earnings statement.
         BP’s Global Indicator Margin, a broad measure of refining
    profitability, averaged $8.19 a barrel in the second quarter,
    versus $16.66 a year earlier. So far this quarter that margin has
    averaged $3.55, according to BP’s Web site.

                               Smaller Profit

         The company’s refining business made a profit of $539 million
    in the period, excluding gains or losses from holding inventories,
    down from $2.74 billion in the year-earlier period. BP’s total
    earnings beat estimates, as net income advanced to $9.47 billion.
         BP, which has interests in 19 refineries around the world,
    processed 2.239 billion barrels of oil a day last quarter, up from
    2.128 billion barrels a day a year-earlier. Maintenance shutdowns,
    or turnarounds, at BP refineries “will be higher in the third
    quarter than in the second,” BP said,
    without elaborating.
         “We are not expecting the economic impact of the turnarounds
    until the second half” at BP, said Jason Kenney, an Edinburgh-
    based analyst at ING Wholesale Banking, in a Bloomberg Television
    interview today.


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