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What do Chicago, Gary, IN, Lansing, Grand Rapids and Flint, Michigan all have in common? They all saw gasoline price averages late last week that exceeded the average cost of gasoline in Honolulu! That's how severe the gasoline supply problem has become in the Great Lakes region.
By now most of you know that the price escalation there is directly attributed to refinery woes at five facilities serving the region which, to date, have been hampered by problems that have greatly reduced production.
Most notably, the BP refinery in Whiting, IN, with capacity at 413,000 barrels per day, has only been operating at about one-third of capacity. Frustrating news; certainly, but, there's a ray of hope...
According to the Dow Jones Newswire, the completion of the extensive modernization project at the Whiting refinery remains on track for the end of June.
The project, which required the shutdown in November of Pipestill 12, the refinery's largest of three crude units, will enable the refinery to process up to about 85% heavy crude, compared to 20% before completion, by reconfiguring the crude unit and starting up a new delayed coker unit to replace an old one. It is now the second largest delayed coker in the world at about 102,000 barrels a day.
A source familiar with refinery operations said the process of starting major, brand new grass roots equipment like BP Whiting's is methodical and involves a lot of steps, including introducing oil, but that doesn't mean streams will be coming off the tower in the next few days.
"A lot of testing has to be done and oil has to go in to check for leaks and other problems," the person said.
The Whiting Refinery has the capacity to process up to 413,000 barrels of oil a day, and producing up to 15 million gallons of refined products. With that capacity, it ranks as the 6th largest refinery in the U.S.
The expansion project began in 2008 and represents an investment of approximately $4 billion according to industry reports.