Coker project nearly complete
BY LARRY TANGLEN Outlook Staff
Wednesday, December 26, 2007CHS Refinery Manager Pat Kimmet anticipates the plant’s new $325 million coker unit will be ready to begin start up on Jan. 30 and be fully operational within the first quarter of 2008.
The refinery has had as many as 2,400 workers on site this past year with construction of the coker, turn-around activities and regular plant operation, Kimmet said.
“Considering that we planned this project before Hurricane Katrina and its impacts in 2005, we are very pleased the project hasn’t been delayed and that we have been able to get the necessary materials and workers that we needed to complete the project,” he said.
Kimmet noted that other similar projects that began before the Laurel refinery’s project haven’t been so fortunate. “The shortage of materials and a lack of craftsmen have caused delays and driven up the cost of bringing other projects on line,” he said. “We were short of gas and product before Katrina hit and we are still feeling the effects of the shortage. That’s why we are pleased to be completing this coker project and increasing our gasoline production,” he said.
“This project will increase our annual production of gasoline by 80 million gallons. That additional gas will be produced without increasing the amount of crude that we receive. We will just be able to recover the gasoline and coke from product that would have otherwise been used to produce asphalt.”
The CHS coker will allow the refinery to make more gasoline and diesel fuel by processing a portion of the asphalt it produces. Through a thermal cracking process, the coker breaks down heavier oils into lighter petroleum products and produces coke as a fuel by-product.
The coker unit will process the asphalt left from the crude oil refining and break down the asphalt further into more gasoline and diesel fuel, leaving coke as a residual product. The coke is a carbon product similar to coal used as a fuel in power generation plants. The coker project follows a $96 million project completed several years ago to reduce sulfur in diesel as required by federal regulations.
The coker unit is made up of two 22-foot diameter coke drums, 80 feet high. Asphalt in the drums is heated under pressure to release lighter petroleum products, leaving the asphalt coke inside the drums. The coke is fractured under high pressure using water and drilled out of the drums. The derrick atop the coker platform rises 299 feet in the air.
The coker will produce about 800 tons of coke a day. The coke will be shipped out daily and will fill eight rail hopper cars. The project is the biggest in the refinery’s history and will make the plant more competitive with the valley’s two other oil refineries.
With the completion of the project, an additional 35 permanent positions will be created that will increase the company’s annual payroll by $3.5 million.
A recent survey conduct by the MSU-B Center for Applied Economic Research indicates that every new job created in the refining sector creates four new additional non refinery jobs. “That means this project’s impact will be felt in our local communities for years to come,” Kimmet said. Kimmet said the project will mean an increase in tax revenue of $50 million to Yellowstone County over the next 20 years. The company is already one of the largest taxpayers in the county.
More than half the refineries in the country have closed over the past 20 years. CHS is one of the few cooperative refineries that has survived. CHS provides jobs for more than 300 full-time employees in Yellowstone County and has an annual payroll including benefits of nearly $30 million, according to Kimmet.
CHS Inc. is owned by farmers, ranchers and cooperatives in the Midwest and West. Laurel Oil and Refining Company built the refinery in 1930. The former Farmers Union Central Exchange purchased it in 1943 for $750,000.
During the 1990s, Cenex completed installation of an $80 million desulfurizing unit at the Laurel refinery, completed the Front Range 16-inch pipeline project from the Canadian border to Laurel, and constructed a new office building in Laurel connected to the refinery by a 256-foot sky bridge over Highway 212.
