Commonwealth Journal

October 8, 2013

Refinery announces $2.2 million expansion

Plant will produce propane and butane

by Bill Mardis
Commonwealth Journal

Somerset —

With a promise of $60 million in upgrades during the next five years, Continental Refining Company (CRC) this week is announcing a $1.6 million to $2.2 million expansion of the former Somerset Refinery that includes a value-added liquid petroleum gas plant and a reactor to produce ultra-low sulfur on-road diesel. The expansion announcement was made yesterday to the Commonwealth Journal and will be made nationally today.
The new gas plant will reduce emissions and process crude-oil liquid petroleum (LPG) byproducts butane and propane. Up to 10,000 gallons of propane and butane can be converted daily, according to Missy Shorey, spokesperson for the refinery. 
The project expands existing infrastructure to capture, pressurize and store high margin, crude oil byproducts propane, butane, and natural gasoline – often referred to as NGL products or Y-Grade. These products, after further processing, are sold as fuel for residential, commercial, and industrial consumers at higher profit margins, a CRC news release said.
Thirty percent of the infrastructure is in place at CRC to process LPG crude oil byproducts. Working in a strategic partnership with Texas-based, Viewpoint Energy, LLC, the remaining 70 percent of mechanical equipment, including additional process piping and compressors, will be provided and installed. 
Construction will take three months after the design phase is complete. The project is expected to be finished next spring. Additional specialized work will be bid to local and regional professionals. 
CRC is expected to shortly take delivery of a newly constructed reactor designed to replace an existing reactor. This will enable the refinery to make ultra-low sulfur on-road diesel (ULSD). The reactor should be in place by late November and is expected to be operating by early December. 
“It is very rewarding to see our hard work and ongoing improvements make a substantial difference at Continental Refining Company and in the Somerset community,” said Demetrios Haseotes, CEO/president of CRC. For the first time in the (former Somerset Refinery’s) 80-plus year history, with the new gas plant, we will go beyond crude oil refining and increase capacity with LPG processing,” he noted.
“In the past these natural byproducts were literally burned away. With the new gas plant we will capture propane and butane, reducing emissions and yielding high-value gas products. Bottom line, this is a big step forward,” Haseotes continued. “We also want to thank the city of Somerset for continuing to work with us,” he added.
Kristopher Gibson, CRC manager, assures the refinery is ready for the challenge.
“With 43 employees at Continental Refining Company, we have an outstanding local team with serious talent to make the gas plant expansion and new LPG product offerings a success. As part of our commitment to community and skill building in Somerset, Continental Refining Company will be training team members to operate the new systems while we continue to improve refinery operations. Thanks to everyone’s hard work and community support we are building a bright future for this refinery,” Gibson said.
Continental Refining Company, designated U.S. Refinery No. 5113, is a wholly owned crude oil refinery located on 93 acres off Monticello Street in south Somerset. It has 15 modern tanker trailers for regional transportation. 
The former Somerset Refinery, purchased by Continental Refining in December 2011, supports local crude oil producers with a dramatic decrease in transportation costs along with favorable crude rates and rapid payment cycles, the company said. The refinery at this point has added 43 jobs in Somerset with an estimated 200 indirect jobs to be created in the region. 
Continental Refining Company is one of two crude oil refineries in Kentucky and one of only 150 refineries in the United States. It is the closest refinery for crude oil producers within a 170-miles radius.
Refining operations began in January, processing crude oil supplied by Sunoco Partners Marketing & Terminal LP as well as regional producers. Now operating at 65 percent capacity, the plant, at full production, can refine 5,500 barrels a day.