BP Presses Forward with Whiting Expansion
Tuesday, July 29, 2008
Oil major BP PLC (BP) has taken the final investment decision to upgrade its Whiting refinery in Indiana in order to run on 80% Canadian heavy crude oil, the company said in its second-quarter results Tuesday.
While construction on the Indiana project has stayed on course in recent months, BP faced persistent criticism from environmentalists over the effects of upgrading the "heavy" low-quality Canadian crude. Earlier this month, the Natural Resources Defense Council, or NRDC, challenged the multi-billion-dollar expansion project in federal court.
"We are confident our permits will withstand court review," the refinery's business unit leader, Dan Sajkowski, said in a statement released by BP on Tuesday.
NRDC argues that increased pollution from the expansion requires that the refinery control its pollution more effectively and operate under a more stringent permit. Ann Alexander, an attorney for the NRDC in Chicago, said the environmental group's goal has never been to stop the expansion - but to make sure it proceeds lawfully. She said the group will continue with those efforts.
"Their massive profits for this quarter are all the more reason for it not to be a problem for them to obey the law," Alexander said.
The legal proceedings have not shut down construction on the project which began in May, according to BP spokesman Scott Dean.
The final cost of the upgrade wasn't provided in the second-quarter results.
The Whiting expansion is scheduled to be completed in 2011 and will increase gasoline production by 1.7 million gallons a day, according to the company. BP has also faced challenges over water permits.
On March 21, the Whiting refinery was restored to its full fuel capacity of 360,000 barrels a day.
BP processed an average of 2.239 million barrels a day through its refineries in the second quarter and increase over the same quarter last year.
The higher output was mainly from recoveries at the Texas City and Whiting refineries. The company posted a 28% rise in second-quarter net profit, from skyrocketing oil prices and its Russian joint venture.
Source: Dow Jones Newswires
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