Sept. 20 (Bloomberg) — BP Plc, Europe’s second-largest oil company by sales, will spend $3 billion to upgrade its Whiting, Indiana, refinery to process more Canadian crude and benefit from increasing production from deposits buried in northern Alberta.
The refinery, the fifth-largest in the U.S., will run almost entirely on heavy Canadian crude,including supplies extracted from oil sands, once the project is finished in 2011, BP America Inc. President Robert Malone said in a press conference today. Construction is expected to begin in 2007.
U.S. refiners, including Valero Energy Corp., the nation’s largest, have invested in plant upgrades to handle heavy or high- sulfur oil from Canada and Mexico. Such oil is typically cheaper, quicker to ship and less susceptible to supply disruptions than crude from the Middle East.
The Whiting refinery, which opened in 1890 on the southern shore of Lake Michigan near Chicago, has capacity to process about 405,000 barrels of oil a day, making it BP’s second largest in the U.S., after its Texas City, Texas, plant.
To contact the reporters on this story: Bruce Blythe in Chicago at bblythe@bloomberg.net .
