BP to spend $3b on reconfiguration of Indiana plant

BP Plc, Europe's second-largest oil company by sales, will invest $3 billion in its Whiting oil refinery in northwest Indiana, so that it can process heavy Canadian crude oil and benefit from rising production from deposits buried in northern Alberta. It could lead to a 15 per cent rise in the company's motor fuel production.

To have most of its feedstock as heavy Canadian crude oil, BP is planning to reconfigure the refinery which is expected to create up to 80 new permanent full-time jobs and 2,500 jobs during the three-year construction phase. Construction is tentatively scheduled to begin in 2007.

BP America chairman and President Bob Malone said, “BP's investment increases the diversity and security of oil supplies that can be refined into gasoline, diesel and other petroleum products in demand by consumers in the Midwestern United States. It also provides a significant market for Canada's abundant heavy crude oil resources.”

“The refinery will run almost entirely on heavy Canadian crude, including supplies extracted from oil sands, once the project is finished in 2011” said Malone.

The Whiting refinery is the fifth largest in the U.S. and produces about 4.5 billion gallons of transportation fuel each year, which is enough to supply more than 5 million vehicles. According to Malone, the refinery will have the potential to supply motor fuels to about 6 million automobiles, after this investment.

BP's Group Vice President for Refining, Mike Hoffman said, that the Whiting Refinery is optimally situated in the U.S. Midwest and has a considerable capacity for reconfiguration as well as effective infrastructure to support this project.

"The planned investment will modernize the refinery with equipment of significant size and scale and competitively reposition it as a top tier refinery well into the future,” Hoffman said. “Following our most recent review of project plans, BP is proceeding with detailed engineering, permitting and procurement to progress this project to construction by the end of next year.”

The project will increase capacity for coking, hydrogen production, hydro treating and sulfur recovery, said BP.