BP refinery considered for expansion

BP’s Whiting, Ind., refinery could be in line for a more than $1 billion expansion as the oil company looks at increasing capacity after damage wreaked by the Gulf Coast hurricanes, a union official said.

Charlie Vesolowski, craft foreman for the Local 150 Operating Engineers, said managers told him they were considering adding a new unit at the Lake Michigan refinery that would take oil from Canada and turn it into gasoline.

The expansion could cost between $1 billion and $2 billion, Vesolowski said.

“They just tell us that over the next couple of years, they’ll be spending a billion or two. That’s what they’re talking about,” he said.

Tom Keilman, a spokesman for BP Products North America, declined comment.

“There are a couple of different things we’ve looked at from time to time,” he said. “We continue to study options.”

The Whiting refinery, which employs about 1,275 workers, has the capacity to process more than 400,000 barrel of crude oil daily.

Energy prices jumped after widespread shutdowns of refineries and oil and natural gas production along the Gulf Coast following Hurricanes Katrina and Rita. Lanny Pendill, an energy analyst with Edward Jones based in St. Louis, said many oil companies are considering expansions.

“BP also stated that it is interested in expanding some of the refineries, particularly so they can handle the lower-quality oil,” Pendill said.

Whiting Mayor Joe Stahura, who worked at BP for 23 years, said he has discussed the possible expansion with the company.

“We’ve been told that we’ll be informed when the official word is announced,” Stahura said. “I’ve learned when you deal with companies like BP, there’s always something in the works, but getting to the final approval stage is a hurdle.”

BP Whiting also is in the midst of a $130 million expansion that will produce ultra low sulfur-diesel fuel to meet or exceed on-road diesel regulations. The new unit will have the capacity to produce about 36,000 barrels per day.

—The Associated Press