Navajo Refining to install hydrotreater, expand capacity at New Mexico plant

By the OGJ Online Staff

HOUSTON, Jan. 8 -- Holly Corp. subsidiary Navajo Refining Co. LP has received permits needed to install a gas oil hydrotreating unit at its 60,000 b/d refinery at Artesia, NM, and expand refining capacity.

The cost of the hydrotreater project will be reduced by using hydrotreating equipment purchased from an Illinois refinery, said Holly, which estimates the project will cost $48 million, including $15 million already spent on engineering and the purchase and relocation of equipment.

The hydrotreater installation, to be completed in 2003, will allow Navajo to expand its ability to produce California-grade gasolines and gasolines that will meet sulfur reduction requirements before regulatory deadlines, said Holly, which did not reveal the target production capacity.

Navajo also received permission to expand refining capacity to 70,000 b/d, expected by yearend 2003. The permits will also permit a second-phase expansion of crude capacity, up to 80,000 b/d, but no schedule for the further expansion has been set.

Holly will need to obtain additional permits to implement needed modifications at Navajo's Lovington, NM, refinery operated in conjunction with the Artesia facility. Those modifications should also be complete by the end of 2003.

Matthew Clifton, Holly president, said, "We are extremely pleased to produce these cleaner-burning gasolines for our New Mexico, Arizona, Texas, Colorado, and Utah customers ahead of our regulatory deadlines."

Last month, Holly agreed to a settlement of alleged federal clean air violations with the US Department of Justice and the Environmental Protection Agency that required it to spend $16-21 million to control emissions from its two refineries (OGJ Online, Dec. 20, 2001).

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