Western Refining trimming New Mexico units

By OGJ editors
HOUSTON, Nov. 10
-- Western Refining Inc., El Paso, is consolidating operations of its two small refineries in New Mexico to reduce operating costs in a period of shrunken refining margins.

To be consolidated at Gallup are the 23,000 b/d refinery there and the 17,000 b/d facility at Bloomfield, which will be idled. Western said total crude throughput will not decline from recent combined levels, which in the first 9 months of this year averaged 25,560 b/d.

The company said the move will cut operating costs by about $25 million/year beginning in the first quarter of 2010.

The Gallup refinery’s processing capacities include 7,000 b/d of catalytic cracking, 8,000 b/d of catalytic reforming, 16,500 b/d of catalytic hydrotreating, 2,500 b/d of alkylation, and 5,000 b/d of isomerization.

Bloomfield’s capacities are 5,000 b/d of catalytic cracking, 5,100 b/d of catalytic reforming, 8,300 b/d of catalytic hydrotreating, and 2,000 b/d of polymerization.

The refineries, about 95 miles apart, process mainly light sweet crude and natural gas liquids produced nearby. Western owns more than 250 miles of crude gathering lines.

“The company is evaluating alternative uses for the Bloomfield refinery, including the possibility of biofuels production,” Western said in a press statement.

Western also operates a 128,000 b/d refinery in El Paso and a 70,000 b/d refinery in Yorktown, Va.

Citing the margin squeeze and low differentials between heavy and sour crude, the company reported a third-quarter loss of $4.8 million, compared to a profit of $109.2 million for the same period last year.

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