Chevron U.S.A. Inc. has changed its plan to modernize and upgrade the efficiency of its big Richmond, Calif., refinery.
The 280,000 b/sd refinery's earlier plan called for construction of a 45,000 b/d Flexicoker.
That part of the project will be dropped. A financial analysis showed total planning, permitting, and, construction costs would approach $2 billion rather than the $1.3 billion previously estimated. So the project became uneconomic.
The revised plan includes early construction of a previously designed cogeneration plant that will burn natural gas to generate power for refinery use. The plant has received California Energy Commission approval.
Also included are projects during the next few years that will improve the refinery's yield of light petroleum products such as gasoline and jet fuel and cut production of heavy fuel oil.
Chevron estimates the changed plan will achieve more than one half of the economic benefits envisioned by the previous plan at one fourth of the cost. The plan involves spending of $400-500 million.
"Our new approach still enables us to make significant improvements in operating efficiency and profitability at our Richmond facility," said Will Price, president of Chevron U.S.A.
"We realized after an exhaustive evaluation there were simply too many economic, environmental, and permitting uncertainties to justify spending what had turned out to be a much larger investment than we originally anticipated."
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