The American Refining Group will soon make a $20 million
investment in its future, with the construction of a new
hydrotreater and related systems at its refinery.
According to ARG President and Chief Operating Officer Harvey
Golubock, the equipment will allow the refinery to upgrade its fuel
oil to meet new ultra low sulfur diesel fuel requirements for
on-road diesel fuel and upgrade its lube base stock production,
which are components used to make finished motor oil.
Officials said the hyrdrotreater will sit on a quarter acre of
land and be located in the main refinery off North Kendall Avenue.
Its construction will also involve the demolition of an old,
medium-sized brick building which had been used as a boiler house
and can be seen from the nearby U.S. Route 219 Bradford Bypass.
Groundbreaking ceremonies for the project will be held Sept. 8
at ARG, according to Golubock. The unit should be operational by
the end of 2007.
“This project is 35 years in the making,” Golubock said. “It’s a
major capital investment for us. We have been talking about this
since 1997 when we took over. It really helps to establish the
long-term viability of the refinery. You really have to have modern
processing units to stay abreast of new technology.”
ARG took over the operations of the refinery that year after the
Kendall and Amalie divisions, formerly owned by Witco Chemical
Corp., were sold in 1996 to Sun Oil. ARG then stepped in and after
months of negotiations purchased the facility.
According to Golubock, most refineries across the country needed
to have the technology in place by June, however, smaller
refineries such as ARG had more time to get one in place and meet
the requirements.
“It will provide fuel for trucks that are being built as of the
2007 model year,” Golubock said, adding most refineries are
required to have 80 percent of its diesel fuel as ultra low sulfur.
“Practically speaking, there is not a real high demand (for the
fuel) and it costs more to produce.”
Golubock said the way to reduce the amount of sulfur is through
hydrogenation.
Hydrogenation includes the reaction between hydrogen and organic
sulfur compounds to form gaseous hydrogen sulfide. That process is
widely used in petroleum refining to desulfurize various final and
intermediate products.
Golubock said the hydrotreater will have two reactors included
in it – one for the diesel fuel and the other for the lube base
stock products.
According to ARG Vice President of Refinery Operations Don Keck,
the hydrotreater was designed by Mustang Tampa Inc. and Criterion
Catalyst & Technologies L.P., with significant input from ARG’s
internal staff.
Keck said Mustang designed the equipment and piping layout,
while Criterion designed reactor internals and catalyst selection.
It will be built by Highlander Energy Products Inc. and ARG will
use internal manpower when necessary.
Meanwhile, Keck said a significant portion of the equipment will
be purchased through Pennsylvania vendors, noting the project will
span 10 months from starting the civil work to complete
construction.
Keck said the footprint will measure approximately 58 feet by 84
feet.
The second unit involved will be a fuel hydrogen sulfide removal
process designed and built by Merichem Gas Technology Products.
That unit will require a roughly 30 foot by 40 foot footprint.
It will be built off-site and consist of several skids; it will
also require 10 months to build and install, according to Keck.
The refinery will be able to pay for the hydrotreater and
related parts “through banking arrangements and internal generated
funds,” Golubock said, adding the footprint for the unit won’t be
very large, but a lot more tanks, pumps and other pieces of
equipment are needed.
“There is a fair amount of equipment associated with it,”
Golubock said.
In regards to the building which will be demolished, Golubock
said it was “starting to get in bad shape and is not in use
anymore.”
According to Golubock, a couple of tanks located inside the
building will have to be moved, along with an adjacent instrument
shop, which will likely be relocated to the former Bentley property
which ARG acquired along Hilton Street.
“We will also be adding onto that building (Bentley property),”
Golubock said.
The last large project undertaken by ARG was the installation of
an Isomerization Unit in 2003, at a price tag of $3.5 million.
The unit is used to upgrade ARG’s low octane light straight run
gasoline blending to a higher octane material. That allows the
refinery the flexibility to produce and market a full range of
automobile gasoline products, including regular grade, mid-grade
and premium.
Another local oil purchaser has also obtained a hydrotreater and
hydrodewaxing unit for its refinery.
On Thursday, Ergon-West Virginia Inc. of Newell, W.Va.,
announced the start-up of its new unit, which comes at a price tag
of more than $45 million.
“This investment … is a further demonstration of the deep
commitment by Ergon to the continued growth and viability of the
Newell refinery and its employees, suppliers and customers,” a
press release to The Era said.
Ergon Executive Vice President H. Don Davis said the unit is
already up and running, having been installed in late May. He noted
the machinery takes up about 2 acres of land.
Officials said the unit produces the new ultra low sulfur diesel
in compliance with Environmental Protection Agency standards, which
requires diesel fuel produced by refineries for on-road use to
contain less than 15 parts per million of sulfur.
The new fuel is a requirement for diesel engines starting with
the 2007 model year.
About 8,000 barrels of ultra low sulfur diesel are produced
daily at the refinery from more than 20,000 barrels of crude oil
Ergon obtains from producers across Pennsylvania, Ohio, West
Virginia and New York state.
Meanwhile, Davis said the hydrodewaxing unit plays an “integral
part” in the entire operation.
According to Davis, the hydrodewaxing unit “cracks up” the wax
molecules that come naturally contained in the crude and converts
them into a component that doesn’t coagulate and make the diesel
fuel cloudy.
“It makes it (fuel) better for in the wintertime,” Davis
said.
Davis said Ergon buys crude from between 50,000 and 60,000
different wells in the states it serves, including some locations
near Bradford.
Ergon owns and operates three petroleum refineries located in
Mississippi, Arkansas and West Virginia producing gasoline, low
sulfur diesel, lubricant and process base oils, asphalt and other
specialty products.
