March 27, 2011 at 3:50 pm #2328
Delaware City refinery: New owner, new plan for refining byproduct
PBF building rail spur to ship out coke
1:14 AM, Mar. 25, 2011 JEFF MONTGOMERY The News Journal
With the first steps of a Delaware City Refinery restart weeks away, owner PBF Holding Company is moving quickly on a new system for shipping out refining byproducts that have been a local headache for decades.
State officials said Monday that workers are developing a rail spur at the 210,000-barrel-per-day refinery capable of handling up to 730,000 tons a year of petroleum coke — a grainy, bottom-of-the-barrel refining leftover.
Port Contractors Inc. has requested an air-quality protection permit for a new rail “transshipment” site for the coke near the Port of Wilmington, where it will then be sent abroad for power-plant fuel or other uses. Company officials have previously said that much of the material could wind up feeding China’s vast energy demand.
PBF had to develop a new coke management scheme after dropping a troubled system that was intended to store and turn the coke into a natural-gas substitute for use in electricity-generating turbines. Past owners of the plant spent hundreds of millions trying to make the gasification system work reliably, while fending off complaints about soot and runoff from stored coke.
“I know that with the gasifier shut down, pretty much all of the coke that’s produced at the refinery is going to have to be shipped out. I think it’s fair to say that a sizable share will have to go to Port Contractors,” said Ravi Rangan, a Department of Natural Resources and environmental control engineer who oversees the Delaware City complex.
Heavy earth-moving work and construction of a large storage building is under way in the refinery’s northwest corner, near two large concrete silos built by previous owner Valero for coke storage but dropped from PBF’s plan.
Port Contractors officials could not be reached for comment. A public notice on plans for the company’s site at 501 Christiana Ave. noted that the operation could generate up to 46.97 tons year of soot and dust, including 14.38 tons of very fine soot, more closely regulated by environmental officials.
Paul L. Parets, a Delaware City resident and City Council member, said state and refinery officials met with residents earlier this month to discuss the reopening plans.
“Most of the things they said were quite reassuring,” Parets said. “At this point, speaking only for myself, the shutdown of the refinery over a year ago has done economic damage to the city, so if the refinery can be run in a safe and profitable manner, that’s a plus for our community. But only if it can be done in a safe manner.”
Employment at the refinery has topped 1,000 workers at times this year as PBF works toward an April deadline for putting the 210,000 barrel-per-day refinery back on-line.
PBF purchased the plant for $220 million in June, in a deal backed by state incentives that included a $20 million state loan and $10 million grant to the company. Before the sale, previous owner Valero wrote off more than $1 billion of the plant’s original value, and at one point planned to raze the site.
During an interview earlier this month, PBF Energy President Michael D. Gayda said the company would not set a deadline for resuming full production.
“This place has been cold for a while, and we want to make sure that we do everything right,” Gayda said. “We haven’t announced any specific dates. One of the problems, of course, is that this is not like walking in and flipping on lights and all of a sudden you start up. This is a process that will go through many weeks.”
Chairman Thomas O’Malley told reporters at the National Petrochemical and Refiners’ Association annual meeting in San Antonio Tuesday that the refinery is on schedule to start in the second quarter, with oil going in about May 1.
PBF also purchased Valero’s Paulsboro, N.J., refinery along the Delaware River and, more recently, Sunoco’s Toledo, Ohio, refinery. The Paulsboro and Delaware plants will collaborate, Gayda said, sharing crude-oil deliveries and handling of partially refined products.
Delaware City was built to process low-cost, heavy, high-sulfur crude oil, earning profits by taking advantage of the price spread between its crude and that of more-expensive and lighter oils. Heavy crudes are harder to process, and refining them can generate more pollution and odors if controls fail or are inadequate.
PBF already has invested millions in additional emissions-control systems, and state officials have said they plan to monitor compliance closely.
“At this point, we’re all looking forward to the safe operation of the plant,” Parets said. “If that doesn’t happen, it’s back to the battlements.”
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