EnCana, ConocoPhillips proceed with refinery expansion
The Canadian Press
September 24, 2008 at 7:06 AM EDT
CALGARY — — EnCana Corp. [ECA-T]and partner ConocoPhillips [COP-N] said Wednesday they are starting construction this month on an expansion at the Wood River refinery in Roxana, Ill.
The coker and refinery project is expected to cost $3.6-billion (U.S.) over three years, half from each company, to increase bitumen-based production for the U.S. Midwest market.
“This refinery expansion and coker addition capture the capital and operational efficiencies of building on a well established refinery,” EnCana chief financial officer Brian Ferguson stated.
“It will be a key component of growing our integrated oil business at a highly competitive capital cost.”
The project will add a 65,000 barrel-per-day coker to convert heavy residual oil into lighter oil and gases, which will enable Wood River to process 130,000 barrels per day of oil sands bitumen.
Total refining capacity will rise by 50,000 barrels per day to 356,000, while eliminating 40,000 barrels per day of low-profit asphalt.
The expansion recently received final regulatory approvals.
Parallel with the Wood River project, the EnCana-ConocoPhillips venture has approved upstream expansions at Foster Creek and Christina Lake in Alberta. Bitumen output is planned to grow from the current 70,000 barrels per day to 180,000 barrels per day in 2012 and 400,000 barrels per day by 2016.
EnCana announced plans in May to split into two: an integrated oil company with the working name of IOCo, and a pure-play North American natural gas producer.
“IOCo will have two strategically located refineries in the U.S., each with significant heavy oil processing capacity,” said Mr. Ferguson, who is to be chief executive of the oil company.
“Combined, the Wood River refinery and the Borger refinery in Texas will have a total heavy oil capacity of 275,000 barrels per day, placing IOCo among the leading heavy oil refiners in the U.S.”
