HollyFrontier may add API Group III base oil production using black wax crude oil at its Woods Cross, Utah, refinery, and the project would take three years to complete, a company executive revealed during a conference call last week.
On Jan. 4, the company had announced plans to expand capacity at its 31,000 barrels per day Woods Cross fuel refinery to 45,000 b/d with expected completion in late 2014. In conjunction with the expansion, HollyFrontier signed a 10-year 20,000 b/d crude oil supply agreement with Newfield Exploration Co., which will supply black and yellow wax crude oil produced in the nearby Uinta Basin region to the Woods Cross refinery, which currently has 10,000 b/d of such crudes.
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Were looking at a phase two [at Woods Cross] that would involve making some lubricants out of the waxy type crudes, Holly Frontier President and CEO Mike Jennings said during a Feb. 28 conference call to discuss quarterly financial results with analysts. We need an additional supply of black wax to cement that. We are looking at various producers in the area to see if thats feasible. If not, well look at it as just from the black wax we have. It appears to be a pretty attractive product in terms of making a Group III-type lubricant, and additional diesel for that market, which is short.
Jennings said HollyFrontier is still contemplating the project. We would start engineering probably in the middle of this year, somewhere in the July timeframe, he continued. Its a three year project to make that happen.
Pat Gribbin, vice president of lubricants and specialty products for HollyFrontier Refining and Marketing LLC, said the Woods Cross base oil project is still undergoing economic and technical review, and the approval and permitting timeline are uncertain.
Our anticipated prospective [base oil] capacity would probably be in the 5,000 to 10,000 barrels a day range, Gribbin told Lube Report. Our intent would be to produce the highest quality lubricants possible with a minimum expectation of a Group III product.
Holly Corp. bought Sunocos Tulsa, Okla., refinery, including its 9,500 barrel per day API Group I base oil plant, for $65 million in 2009. Holly and fellow independent refiner Frontier Oil completed their merger in July 2011, forming HollyFrontier Corp., which is headquartered in Dallas.