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U.S. refiners case Canadian crude
A scramble is under way among smaller U.S. refineries to grab a chunk of Canada’s heavy oil production.
The Montana state government has hired a consultant to assess the interest in building industrial-sized plants in seven towns to process synthetic crude from the Alberta oil sands, while Frontier Oil hopes to utilize plans to expand its Western U.S. refineries to attract heavy crude volumes.
The Montana consultant is expected to report on the mood among residents of the seven communities by November, according to a spokesman for Gov. Brian Schweitzer.
As output from the oil sands grows from 1 million barrels per day to an anticipated 3 million bpd by 2015, the state hopes the upgraded crude will find its way to Montana facilities for refining.
Frontier spending US$187 million Meanwhile, Frontier expects to spend US$187 million on two plants: upgrading and revamping its 110,000 bpd refinery at El Dorado, Kan., and building a saturated natural gas plant at its 52,000 bpd facility at Cheyenne, Wyo.
The work is scheduled for completion by 2009 as Frontier expands its ability to run a full slate of world crudes.
Overall, Frontier is budgeting $420 million on upgrades at El Dorado and Cheyenne as the company focuses on building its presence in existing markets rather than attempting to enter new territory.
The Kansas refinery, which processes 60,000 bpd of West Texas sour, has just started processing 15,000 bpd of Canadian heavy following the reversal of Enbridge’s Spearhead pipeline from Chicago to Cushing, Oklahoma.
—Gary Park
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