January 4, 2006 at 12:53 am #4267
Coffeyville Resources Refinery and Fertilizer Plant Commences Major Expansion and Upgrade
Tuesday January 3, 12:42 pm ET
KANSAS CITY, Kan.–(BUSINESS WIRE)–Jan. 3, 2006–Coffeyville Resources, LLC today announced that the Company’s Board of Directors has approved a $92 million expansion of its wholly owned refinery, Coffeyville Resources Refining & Marketing, and nitrogen fertilizer facility, Coffeyville Resources Nitrogen Fertilizers.
A series of interrelated projects will increase crude oil throughput of the refinery by 15 percent to more than 115,000 barrels per day. Downstream processing is being expanded to accommodate higher and heavier crude inputs. At the nitrogen fertilizer facility, the expansion will boost both Ammonia and Urea Ammonium Nitrate (UAN) production. UAN production will significantly increase from 650,000 tons to over one million tons per year.
“Through this expansion, the refinery will be able to meet growing demand in the Midwestern markets. Our fertilizer expansion leverages our low cost, highly efficient coke gasification process and furthers our position as a major player in the nitrogen fertilizer industry,” said Jack Lipinski, Chief Executive Officer. “With the approval of this latest expansion, commitment to our capital program has grown to over $350 million through 2007.”
The refinery expansion will be completed in late 2006 and includes:
- Expansion and revamp of the crude and vacuum units to increase crude capacity and allow the refinery to process heavier crude oils.
- Revamp of the Fluidized Catalytic Cracking Unit that will increase the yield of gasoline and diesel fuel.
- Delayed coker improvements which will allow the refinery to process heavier, lower cost crude oils.
This expansion complements the current major capital program at the refinery. Already under construction are a new diesel hydrotreater and a new sulfur recovery unit that will allow the refinery to meet Tier II ultra-low sulfur diesel fuel standards. These projects are on schedule for mid-year 2006 completion. In addition, construction of a new Continuous Catalytic Reformer, which will increase the production of gasoline and hydrogen used in the production of clean fuels, is scheduled for completion by fourth quarter of 2007.
Fertilizer facility upgrades include:
- Expansion of the secondary gasifier to increase hydrogen production, with the additional hydrogen being converted to ammonia. This project is scheduled for completion in July 2006.
- Addition of ammonium nitrate capacity by the end of 2006.
- Additional urea capacity by fall 2007.
In addition, the nitrogen fertilizer plant, which uses petroleum coke as the feedstock for its gasification process, will benefit from the delayed coker improvements at the refinery. Coffeyville Resources Nitrogen Fertilizers is the only nitrogen fertilizer facility in North America that uses petroleum coke as a feedstock.
“We will have several hundred contractors on site for the next few years,” said Stan Riemann, Chief Operating Officer. “This will be a significant boost for the local economy.”
First built in 1906, various owners have expanded the refinery, both in capacity and complexity, throughout its 100 year history. In 1998, the nitrogen fertilizer plant was built adjacent to the refinery complex.
Coffeyville Acquisitions, LLC, a partnership of GS Capital Partners — the private equity arm of Goldman Sachs Group — and private equity investment firm Kelso & Company acquired Coffeyville Resources, LLC and its subsidiaries in June 2005.
About Coffeyville Resources, LLC
Coffeyville Resources, LLC is an independent and sophisticated petroleum refiner and marketer, and the low cost producer and marketer of upgraded nitrogen fertilizer products in North America. Coffeyville Resources’ group of companies includes Coffeyville Resources Refining & Marketing, LLC, a 100,000 BPD oil refinery in Coffeyville, Kansas; Coffeyville Resources Crude Transportation, LLC, a crude oil gathering system throughout Kansas and northern Oklahoma; Coffeyville Resources Terminal, LLC, a refined products terminal in Phillipsburg, Kansas; Coffeyville Resources Pipeline, LLC; and Coffeyville Resources Nitrogen Fertilizers, LLC, which operates a unique coke gasification-based nitrogen fertilizer plant adjacent to the refinery that annually produces over 700,000 tons of nitrogen fertilizer products. With nearly 475 employees, and headquartered in Kansas City, Kansas, Coffeyville Resources generates more than $2.5 billion in annual revenues and is among the most significant employers in southeastern Kansas.
For more information, please visit http://www.coffeyvillegroup.com.
Contact:Coffeyville Resources, Kansas City
Angie Dasbach, 913-982-0482
January 7, 2006 at 9:16 pm #7676
Coffeyville is expanding crude capacity by 115 MBD of heavier crudes to max out its Coker & Nitrogen plant that is printing money these days. The petcoke is gasified to make nitrogen fertilizer and will be completed in 2006.
The story behind the story is that petcoke gasification into fertilizer is reaping one of the first benefits from demand destruction from the NG industry. The US Fertilizer industry @ $2.50/MMBTU Natural gas made Nitrogen fertilizer at $100/ton and ran 93% capacity, and was net exporter. Today at $6-11/MMBTU natural gas the +$350/ton cost is too far above global market to compete and so the industry is at 53% capacity (mostly non NG fueled plants like Coffeyville operating) and a net importer.
This industry WAS one of the Top 5 natural gas industrial consuming markets and is good alternate for refineries to pursue since NG will likely stay above the $4.50/MMBTU required to support incremental LNG imports needed to meet NG demand (pre demand destruction levels that is).
Pace Global Services
April 29, 2007 at 3:55 pm #7419
My how times have changed. In 99 my refinery (NCRA) and Coffeyville were merged in a shotgun wedding. Our parent cooperatives were thought to be merging and they decided to merge their refining interests early. When the merger of CHS and Farmland fell through we were in a fix. We could not not make enough money to make up for how much they were losing. In 2001 we split up and went our seperate ways. At the time we were told that Coffeyville would in all likelyhood be down in a year or less. Farmland was in Bankruptcy and they literally could not give the place away. I distinctly remember a plant wide meeting in which our plant mamager was asked if we would be taking over Coffeyville and running it. His response was ” even if we could get it for free, we still don’t want it. The cost to upgrade and remain compliant was far beyond our ability to meet”. I’m sure those words have haunted him every since, but back then nobody could foresee the outrageous margins we are enjoying today or that they could make ammonia based fertilizer from coke for far less than anybody else could.
June 12, 2007 at 4:53 pm #7376
Mangiarotti S.p.A. fabricated and delivered a large HDS Unit for Coffeyville. Weight of the unit exceeded 400 tons.
For information on Mangiarotti, please email email@example.com.
July 6, 2007 at 2:34 am #7347
ok, what now? Don’t tell me that extra margins at the pump will reflect in lost opportunity proceeds due to above margin precipitation!
You must be logged in to reply to this topic.