Oil refiner lays groundwork for expansion

Gitte Laasby, May 19, 2008, Post-Tribune, WHITING -- BP has been working on the foundation for its new construction since the Indiana Department of Environmental Management issued an air permit construction approval on May 1.

The $3.8 billion investment to modernize the oil refinery and prepare it to process Canadian tar sands is the most expensive industrial development project in the state. In comparison, the new Honda plant in Greensburg, where it will produce 200,000 vehicles annually, will cost $550 million.

The $3.8 billion investment to modernize the oil refinery and prepare it to process Canadian tar sands is the most expensive industrial development project in the state. In comparison, the new Honda plant in Greensburg, where it will produce 200,000 vehicles annually, will cost $550 million.

Tom Keilman, BP Whiting spokesman, provided details on what is planned.

"The three biggest components of the new project are: Rebuilding the sulfur recovery unit. We're building a new petroleum coker on the southeast corner of the refinery along 129th. We're demolishing some asphalt storage tanks," Keilman said. "We're doing an upgrade of the existing pipestill in East Chicago north of the asphalt tank field."

On a vacant property at the north end of the refinery, the company is building a gas oil hydro treater, which produces an intermediate product that's later further refined into gasoline, Keilman said.

The centerpiece of the Whiting upgrade is a process stage known as a delayed coker. It's a furnace where high temperatures are used to "crack" the long chains of hydrocarbons in residue into gas oil, which can be converted into transportation fuels.

The existing coker at Whiting has old technology that has been largely unchanged since around 1900, according to BP. With 580,000 square feet, the new coker will be among the world's largest and have more automated features.

The project will increase the refinery's capacity to process heavy crude oil from Canadian tar sands by 260,000 barrels per day and increase gasoline and diesel production by 1.7 million gallons per day. BP estimates the modernization project will add about 2,000 contractor jobs during construction and 80 new permanent jobs.

BP is also working out an agreement to use the barge landing on Dickey Road by the canal that ArcelorMittal owns to bring in materials.

"They are repairing the barge that has been there for years. It has fallen in disrepair. They're going to be reconstructing it to make sure it can bear what they're doing," said Ernest Hagler, commissioner of the East Chicago Building Department.

Parts of the new buildings are in East Chicago while others are in Whiting, so the two cities need to be in agreement about what to allow, Hagler said.

"There'd have to be some discussion. It should be basically the same thing. We're basically using IDEM's guidelines," he said.

Any construction work before that day, other than digging holes and clearing the area, would be illegal without a permit, Hagler said.

Construction is supposed to be complete by 2011.