Ergon Invests $150M in Vicksburg Upgrades

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Ergon yesterday said it will invest $150 million in upgrades at its Vicksburg, Miss., naphthenic base oil refinery, including enhancements to its crude distillation unit, modifications to its base oil hydrotreaters and expansion of storage facilities to accommodate new product offerings.

These investments will allow Ergon to further diversify its product portfolio, Don Davis, president of Ergon Refining Inc., said in a news release. Davis said the upgrades will allow Ergon to produce next generation low aromatic products and high quality bright stocks.

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The investment will also enable the refinery to process a broader range of crude oils from across the globe.

The company said the project will optimize equipment installed during the refinerys $250 million expansion in 2009. Ergon completed expansions at the naphthenic base oil plant in 2006, 2009 and 2010 to reach its present day capacity of 22,000 barrels per day.

Stephen B. Ames of SBA Consulting, Pepper Pike, Ohio, said the upgrades appear to be more about expanding product range than about increasing production volumes.

The main change is to add deeper, more severe hydrotreating, Ames told Lube Report. That will allow them to further saturate the aromatic molecules within the base oil, making a better, more stable and lighter-colored product.

He noted the naphthenic oils are sold as process oils. There are applications where having an array of different quality oils can better meet the customers requirements, he said.

The crude unit changes at Vicksburg will provide important flexibility. Many naphthenic crude oil fields are old and declining, Ames pointed out. Theyre modifying the crude unit to be able to handle a wider range of crude oils than historically have been in their selection portfolio.

Ergon has invested more than $600 million into its specialty base oil refineries in Vicksburg and in Newell, W. Va., over the past 10 years.

In late 2012, Ergon announced plans to invest $78 million to expand its Newell subsidiary refinery to process crude oil from the Marcellus and Utica shale areas, regional sources with increasing output. The expansion was also expected to enable a modest boost in specialty oil production from the sites paraffinic base oil plant. The Newell refinerys plant has capacity to produce 1,900 b/d of API Group I and 2,900 b/d of Group II paraffinic base oil.

The company has increased its global distribution footprint with terminals in Europe, Latin America, the Middle East, Africa and Asia.