[pea-jay]

C'mon Pops, wouldnt you really rather pay the 3.5x that is pretty close to pricing around here...

[Pops]

$this->bbcode_second_pass_quote('pea-jay', 'C')'mon Pops, wouldnt you really rather pay the 3.5x that is pretty close to pricing around here...

[pea-jay]

$this->bbcode_second_pass_quote('Pops', '')$this->bbcode_second_pass_quote('pea-jay', 'C')'mon Pops, wouldnt you really rather pay the 3.5x that is pretty close to pricing around here...

[Twilight]

Infrastructure projects are exceeding initial estimates left, right and centre, thanks to cost increases in building materials. It's not just increased demand from China, it's the hidden energy content too. I can't believe these people assumed that when oil hit $70 per barrel, they'd build adaptations using $25 oil. Doesn't work like that.

[Wiltshire_rules]

The individual or team faced with a decision on a big capital project like this are faced with a big uncertainty: if crude prices continue to rise, will the resulting price rise in petrol (gasoline) / diesel cause demand destruction?

Many people on this site and on TOD feel that demand for refinery products will continue to rise, but they aren't betting lots of money on their opinion. If you were a conscientious senior manager with a refinery firm you would need to be very sure that demand for refinery products will continue to rise before committing to spend hundreds of millions of dollars. Even a small amount of doubt would lead you to run what you've got to the maximum rather than expand production capacity.

[Ferretlover]

Reuters 13 Jun 2007 HOUSTON - Little-known, privately held Hyperion Resources Inc. said on Wed it plans to build an $8 billion oil refinery, the first in the United States since 1976, at one of several sites under consideration in the U.S. Midwest. Dallas-based Hyperion plans a 400,000 barrels per day (bpd) refinery as part of “the most environmentally sound energy center in the United States” that will include a power plant fueled by petroleum coke, a refining byproduct.
The plant will refine crude from the Canadian oil sands in Alberta to feed the U.S. market, the company said. ... Hyperion is in a race to build the first U.S. refinery in 30 years with Arizona Clean Fuels Yuma, which has been struggling for years to obtain funding for its nearly $3 billion refinery plan that has so far secured about $35 million ...
Refinery

[DantesPeak]

Despite many press reports to the contrary stating no new US refineries were planned (except until recently for Elk Point, South Dakota), a refinery planned for the desert area outside Yuma, Arizona has been seeking governmental approvals for eight years.

Not mentioned here but progress has been slowed by local opposition.

Link includes video showing site.

$this->bbcode_second_pass_quote('', 'C')an new refinery help ease gas prices?

By Ted Oberg

(6/30/07 - KTRK/YUMA, AZ) - While gas prices declined for the fifth straight week, experts say that could end just in time for the July 4th. Holiday travel and rising crude prices could be the reason.

The average price for regular gas in Houston is $2.83. Experts tell us one of the reasons prices stay so close to $3.00 a gallon is that there simply aren't enough oil refineries to make gasoline in the United States.

It doesn't look like refinery row, at least not as we know it. Yuma, Arizona is a small place to begin with. We travel to a spot 40 miles outside of town, in the middle of the Sonoran Desert between Yuma and Phoenix.

And while it may seem strange, for the last eight years, Glenn McGinnis' company has been trying to build an oil refinery on patch of sand here.

"I thought it was the best place I've ever seen to build an oil refinery," he said.

If he's successful, it'd be the first new oil refinery built in the United States since 1976.

"One of the problems with a project like this is that it takes time," McGinnis said.

[Tanada]

The biggest problem is the excessivly short attention span of the average NIMBY and BANANA screaming American.

They forget that three weeks ago we were setting gasoline price records, that oil is at or near $70.00/bbl with a low in the last 12 months of $50.00/bbl ish.

Nothing can get through their hard little heads.

[Tanada]

AHA! I wondered what was taking so long, now that a pipeline for syncrude from Alberta is built it only makes sense to build a refinery optimized to utilize it.

[DantesPeak]

$this->bbcode_second_pass_quote('Tanada', 'T')he biggest problem is the excessivly short attention span of the average NIMBY and BANANA screaming American.

They forget that three weeks ago we were setting gasoline price records, that oil is at or near $70.00/bbl with a low in the last 12 months of $50.00/bbl ish.

Nothing can get through their hard little heads.

[advancedatheist]

I read a year ago that the company expected to get oil from Mexico. With the crash of Cantarell, that part of the business plan has gone to hell.

[MonteQuest]

$this->bbcode_second_pass_quote('advancedatheist', 'I') read a year ago that the company expected to get oil from Mexico. With the crash of Cantarell, that part of the business plan has gone to hell.

[cube]

My gut tells me this project will never see the light of day. By the time the investors pay all the lawyers there won't be enough money to hire the engineers.

However I think this project is in-significant relative to the grand scheme of things. If you want to see where the real action is you need to direct your attention back east...as in the Middle East and Chindia.

forget about 150,000 bpd how about 4 x 400,000?
$this->bbcode_second_pass_quote('', 'T')he refinery is the fourth new domestic plant that the world's largest oil exporter is planning to build. The four plants combined would boost Saudi Arabia's refining capacity by as much as 1.6 million bpd...

[advancedatheist]

$this->bbcode_second_pass_quote('MonteQuest', '')$this->bbcode_second_pass_quote('advancedatheist', 'I') read a year ago that the company expected to get oil from Mexico. With the crash of Cantarell, that part of the business plan has gone to hell.

[pup55]

Kansas City Star
$this->bbcode_second_pass_quote('', 'C')ross the overpass, and it smacks you. Empty one- and two-story motels, rows of doors kicked open to let the fresh air in. Once-lush grass now covered in oil. Deserted gas stations, prices stuck at $2.99 a gallon, where they were late last month.
And then there’s the smell, an odor so strong you instinctively cover your nose. So strong at times it hurts your lungs.

[Tanada]

Tear it all down and rebuild it only if it is really needed, above the flood plain altitude! Why the heck the government/insurance companies are willing to help fools build in places where flooding occurs has never made any sense to me. I checked the FEMA map for my house before I bought it, we are only 7 blocks from the river but it is slightly uphill and we are outside the 500 year flood zone.

[emersonbiggins]

Wow , so what's the BEP on this 45,000 BPD expansion?

$this->bbcode_second_pass_quote('', 'T')ULSA, Okla. (AP) -- Sinclair Oil Corp. announced plans Thursday for a $1 billion expansion at its Tulsa refinery, a move that would increase daily output of diesel and gasoline by 60 percent, add hundreds of jobs and reduce emissions.

The expansion at the west Tulsa location, which supplies petroleum products to states throughout the Midwest, also proves that the city can continue to be a player in today's global energy market, officials said.

"The discovery of oil on the west bank of our river really changed the future of Tulsa forever," Mayor Kathy Taylor said at a news conference Thursday. "This billion dollar investment tells the world that Tulsa is here to do business."

Sinclair's announcement is "proof the energy industry is alive and well in the Tulsa region today," said Mike Neal, chief executive officer of the Tulsa Metro Chamber.

The expansion would increase crude oil processing capacity from 70,000 barrels per day to 115,000 per day, on par with the output at more than 140 refineries operating in the U.S.
...
KJRH Tulsa article

[pup55]

I will have to dig out my refinery economics thread, but of course, the BEP depends entirely on what your estimate for the future price of gas is.

At the time we did this thread a couple of years ago, the cost for new refining capacity was $15,000-$16,000 per BOD capacity. The fact that it has gone up to $22,222 per this deal is quite significant. It tells you that the cost for refining capacity has gone up something like 33% since then.

I still believe that the cheapest way to get refining capacity is to buy it in the stock market. At the current price for Valero stock, their refining capacity (3.3 million bpd) is priced at only $13K per BOD. Tesoro's refining capacity is only about $6000 per BOD, and HOC's refining capacity can be had for $19,000 per BOD. So, somebody that wants to get into this business would be much better off to buy out some other company who is already in it. Warning: Valero's refineries are not in particularly good shape: they seem to have been the poster child for refinery downtime this spring, so maybe there is some risk in this approach.

What this also does is confirm that Sinclair must feel pretty strongly about this business going forward or they would not want to pay so much for the incremental capacity.

http://peakoil.com/fortopic6385.html+economics

[emersonbiggins]

Thanks, pup. Yes, it definitely suggests that Sinclair believes that increased refining capacity is necessitated per the market, and this expansion will likely increase their utilization of the heavier, sulfurous crudes that are expected to become the norm.

I am left to wonder what the net increase will be though, if the entire refinery is not upgraded for the heavier crudes, and if there is not enough sweet light to run the non-upgraded part of the refinery at capacity.