Project would bring heavy oil to West Texas

By OGJ editors
HOUSTON, Apr. 21 -- Centurion Pipeline LP launched an open season to determine interest in a proposed reversal project that would deliver heavy Canadian crude from Cushing, Okla., to West Texas.

A possible buyer of heavy crude is Holly Corp. of Dallas, which plans to reconfigure its Artesia, NM, refinery to handle heavy crude. A Holly spokesman confirmed that the pipeline reversal, if implemented, would give Holly access to heavy crude.

Holly's 85,000-b/sd refinery is being expanded to 100,000 b/sd, with completion scheduled for first-quarter 2009. The reconfiguration to process heavy crude also is expected to be completed in 2009.

Centurion's 16-in., 375-mile pipeline runs to Slaughter, Tex., which is within 60 miles of the Artesia refinery, the Holly spokesman said.

The pipeline is known as the No. 1 Pipeline. Centurion's 30-day open season began Apr. 14.

Occidental Petroleum Corp., Centurion's parent company, said the No. 1 Pipeline is one of two 16-in. pipelines that Centurion currently operates from Slaughter to Cushing.

"Centurion recognizes that there are several ongoing projects that will bring heavy Canadian crude to more than one Cushing terminal," said Richard Kline, Occidental communications vice-president in Los Angeles. "Centurion is looking to be able to provide a new transportation capacity from Cushing for those projects and movements to markets in the Permian basin and surrounding area," he said.

The reversed pipeline could be in southwest-bound service as early as fourth-quarter 2009. Its projected capacity is 60,000 b/d.

"Oxy will continue to market Permian basin production so as to receive the maximum possible value," Kline said.

Holly's reconfiguration
Holly is making a series of investments in the Artesia refinery, which is also known as the Navajo Refining Co. LP refinery.

In 2006, Holly completed an ultralow-sulfur diesel project and expanded the refinery to 83,000 b/sd from 75,000 b/sd. This included a refinery expansion and conversion of the distillate hydrotreater to gas oil service, conversion of the gas oil hydrotreater to ULSD service, expansion of the continuous catalytic reformer, expansion and conversion of the kerosene hydrotreater to naphtha service, installation of additional sulfur-recovery capacity, and installation of a 10 MMscfd hydrogen plant.

Crude capacity then was increased to 85,000 b/sd by relocating heat exchangers and replacing pumps in the crude unit.

In December 2006, Holly announced plans to install a 15,000 b/d hydrocracker and a 28 MMscf hydrogen plant at a cost of $125 million to increase liquid volume recovery, increase the refinery's capacity to process outside feedstocks, and increase high-value product yields, as well as meet new low-sulfur gasoline specifications (OGJ, June 4, 2007, Newsletter).

The hydrocracker and hydrogen plant projects will provide improved heavy crude oil processing flexibility.

In February 2007, Holly said it was revamping a crude unit to increase crude capacity at the refinery to 100,000 b/sd. Holly also plans a revamp a second crude unit and to install a solvent deasphalter unit.

It expects the expansion portion of the overall project consisting of the initial crude unit revamp, the new hydrocracker, and the new hydrogen plant to be completed and operational by the fourth quarter.

"The completion of the heavy crude oil processing portion of the overall project, including the second crude unit revamp and the installation of the new solvent deasphalter, will be targeted to coincide with the development of future pipeline access to the Navajo refinery for heavy Canadian crude oil and other foreign heavy crude oils transported" from Cushing, the Holly web site said.

A new sulfur recovery unit currently under way will permit the refinery to process 100% sour crude and is planned for start-up in the third quarter of 2008.

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