BP Launches $4.2 Billion Modernized Refinery in Indiana

BP Plc has started up a $4.2 billion oil conversion processing unit that represents the largest private sector investment in the history of the state of Indiana.

The oil giant says the project at the Whiting facility will deliver some $1 billion of operating cash flow annually, and the total cost included $400 million in federally mandated pollution controls with state-of-the-art water treatment and air emissions technology.

According to BP, the 102,000-barrel-per-day unit will largely process heavy crude, including Canadian bitumen, into gas oils for use in gasoline and into petroleum coke for use in overseas energy production.

This is the culmination of modernization efforts ongoing since 2008 with the goal of increasing the facility’s capacity to process more Canadian heavy crude while at the same time cutting down on emissions. When the project began, the BP facility could only process 20% heavy sweet crude and now its capacity is 85%.

Spurring this project is a boom in production of heavy sweet crude in the Dakotas and Canada.

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Iain Conn, chief executive of BP’s downstream segment, said that depending on market conditions, the refinery now has the potential to create an additional $1 billion in operating cash flow each year.

“The safe start-up of this world-scale coker is the last major step in unlocking the full potential of the Whiting Refinery for our shareholders,” Conn said in a statement issued Wednesday.

The massive Whiting facility refinery runs along the Lake Michigan shoreline in Whiting, Hammond and East Chicago.

BP is also working on modernizing other refineries, including one in Chery Point, Washington and another in Toledo, Ohio.

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