Conoco Inc. has pressed into service a new $50 million low sulfur diesel hydrotreater at its Ponca City, Okla., refinery, to meet sharply higher demand for low sulfur diesel fuel in the U.S.
The increased demand stems from new environmental regulations calling for reduced sulfur levels in on-highway diesel beginning Oct. 1 (see related story, this page).
The Ponca City refinery shipped its first batch of low sulfur diesel to Midcontinent customers in early September, almost 2 months before it held a ribbon-cutting ceremony to unveil the new hydrotreater.
The plant responded to reports of spot shortages of low sulfur diesel by temporarily increasing production to 40,000 b/d from 23,000 b/d.
The Ponca City project took slightly more than 2 years to design and build and includes a $30 million hydrogen desulfurization unit plus a new automated blending system and tankage for rapid pipeline distribution. The storage system consists of 10 news tanks, four of which hold 80,000 bbl each of low sulfur diesel.
Conoco said it has made significant capital investments at its Billings, Mont., and Denver refineries as well to meet the new diesel specs.
Its Lake Charles, La., refinery, where there is a large market for high sulfur diesel, is not slated for modification to produce low sulfur diesel. In the Gulf Coast area, there is an exchange market that will enable Conoco to provide its customers with the required volumes of low sulfur diesel, the company said.
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