By OGJ editors
HOUSTON, June 15 -- Hyperion Resources Inc., a privately held Dallas exploration and production company, announced plans to build a 400,000 b/d refinery in Union County, SD, or elsewhere in the US Midwest, according to the South Dakota Governor's Office of Economic Development (GOED).
The refinery, part of what the company calls the Gorilla energy complex, would be the first such facility constructed in the US in more than 30 years.
Hyperion Project Executive J.L. Frank confirmed that a tract of land in Union County is one of the sites in the Midwest being considered for the "green energy center." Frank called the Union County site "sufficiently attractive that we've taken several options on land there, and we may take a few more."
The energy center's refinery would produce transportation fuels including ultralow-sulfur gasoline and ultralow-sulfur diesel from heavy oil from Canada.
If built in Union county, the refinery could receive crude from TransCanada's proposed 2,965-km Keystone oil pipeline, which will deliver 435,000 b/d of oil from Hardisty, Alta., to Wood River and Patoka, Ill. (OGJ, Feb. 19, 2007, p. 48). TransCanada has oil pipelines between Patoka to the hub at Cushing, Okla.
The Keystone system, now in approval stages, is scheduled for construction by early 2008 and for operation in late 2009. The part of the proposed system that would extend through South Dakota would cross the Missouri River near Yankton, just 30 miles west of Union County.
Frank, former president of Marathon Ashland Petroleum, said, "Gas prices are the highest in US history, and the US refining infrastructure hasn't seen a significant change since 1976. The fact is, refining capacity in this country has not kept pace with demand."
The Gorilla project, reportedly to cost $6-8 billion, is being touted in the Union County area for its strong economic advantages. The refinery's construction would employ about 4,500 workers over 4 years, Frank said, with a peak work force of about 10,000. When operational, the refinery would employ about 1,800.
The refinery would have an integrated gasification combined cycle plant, fed by petroleum coke from the refinery, to supply electricity, hydrogen, and steam, Frank said. Emissions would be substantially lower than those from conventional power generation plants.
A Hyperion executive involved with the Gorilla project was reported by the Sioux City Journal as saying the company hopes to select a site during the next year. Hyperion has not disclosed information about financing.