BP Gulf Oil Spill No Barrier to $3.8 Billion Refinery Expansion
June 02, 2010
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By Joe Carroll
June 2 (Bloomberg) -- BP Plc’s $3.8 billion expansion of the largest refinery in the U.S. Midwest won’t be delayed by criminal and regulatory probes into the company’s role in the largest oil spill in the country’s history.
BP is upgrading a 119-year-old refinery in Whiting, Indiana, on the southern shore of Lake Michigan to process more heavy crude from Canada’s oil sands, according to the London- based company’s website. The expansion will enable the plant to boost daily gasoline production by 1.7 million gallons, which at current retail prices would be worth $1.69 billion a year.
The U.S. Environmental Protection Agency in November ordered the Indiana Department of Environmental Management to review construction and operating permits issued for the expansion in 2008.
The review, which hasn’t interrupted work on the project, isn’t taking into consideration the April 20 explosion at a BP well in the Gulf of Mexico that killed 11 workers and spewed millions of gallons of crude into the sea, said Rob Elstro, a spokesman for the state environmental agency.
“The Whiting permits are being evaluated independently of the spill,” Elstro said today in a telephone interview from Indianapolis. “This preceded the spill.”
Scott Dean, a spokesman for BP, didn’t immediately return a telephone message seeking comment. The company said in a March filing with the Securities and Exchange Commission that it’s in talks with federal environmental regulators over the review.
Amoco Purchase
BP, which acquired the Indiana refinery as part of its $61.7 billion purchase of Amoco Corp. in 1998, is constructing a new coker, distillation unit and sulfur-removal equipment as part of the expansion. The project is to be finished in 2012.
The Whiting refinery, located 18 miles southeast of downtown Chicago, can process 405,000 barrels of crude a day, according to a public filing.
BP was leasing Transocean Ltd.’s Deepwater Horizon drilling rig last month when an explosion and fire sank the vessel. Since then, BP has been attempting the halt leaks from the Macondo well that have gushed crude into the Gulf that is threatening fisheries, oyster beds and tourist beaches from Louisiana to Florida.
--Editors: Charles Siler, Kim Jordan
http://www.businessweek.com/news/2010-06-02/bp-gulf-oil-spill-no-barrier...
