Tosco to invest in West Coast refineries to produce cleaner fuels

Aug 03, 2000 02:00 AM

Tosco will invest $ 375 mm over the next five years in its West Coast refineries to produce new clean fuels and increase the yields and efficiencies of its plants. About $ 220 mm will be invested at Tosco's Ferndale Refinery in Bellingham, Washington. In addition, over $ 150 mm will be spent on projects at Tosco's California refineries.
Thomas D. O'Malley, Tosco Chairman and CEO, said " This investment program is designed to accomplish five important goals. First, it will allow Tosco to convert its total gasoline production in California to MTBE-free, CARB Phase 3 gasoline.
Second, it will enable Tosco to produce all of its diesel fuel as the ultra low sulphur fuel that is expected to be mandated by the Environmental Protection Agency (EPA), and to do this well in advance of the proposed 2007 deadline.
Third, we will also be able to produce more gasoline and diesel from our existing plants, balancing our refining and retail requirements on the West Coast. Fourth, this program will include replacement of Ferndale's Thermal Cat Cracker with a modern more efficient Fluid Cat Cracker, which should provide an excellent return on investment and configure Ferndale for the future.
Finally, this investment program can be accomplished well within our general capital spending levels expected over the next few years and in total will provide a modestly better return on capital than Tosco presently enjoys. Tosco has been careful to limit its spending to less than its free cash generation and we will continue to follow that discipline."

This investment program demonstrates Tosco's continued commitment to supplying its West Coast customers with high quality, environmentally improved motor fuels including low sulphur gasoline, ultra low sulphur diesel fuel and MTBE-free gasoline. By making these investments in its California and Washington refineries, Tosco will be able to balance its gasoline production on the West Coast with the needs of its customer base. Successful completion of these environmentally important projects is dependent on an efficient and timely permitting process.
Approximately $ 220 mm will be invested at Tosco's Ferndale Refinery in Bellingham, Washington. The bulk of this investment will be used to install a new state-of-the-art Fluid Catalytic Cracker Unit (FCCU) which will improve gasoline production at the refinery by over 10 % and reduce operating costs. Additional capital will be used to produce the new low sulphur gasoline mandated by the EPA and the ultra low sulphur diesel fuel the Agency recently proposed.
In addition, over $ 150 mm will be spent on projects at Tosco's California refineries in the San Francisco Bay area (Rodeo) and Los Angeles, which will increase clean product production at north refineries by a total of about 10,000 bpd. The projects will enable Tosco to meet the new environmentally improved specifications for MTBE-free gasoline under the CARB Phase 3 gasoline regulations. As a result of these investments, Tosco will also produce ultra-low sulphur diesel fuel (14 ppm) at both its Los Angeles and Bay area refineries by 2003, well in advance of the EPA's proposed deadline of 2007.
O'Malley concluded, "Spending for Tosco's East Coast and Mid Continent systems is still being evaluated and will be announced at a later date. Again, the spending will be oriented to provide a return to shareholders and will be accomplished within our general capital spending levels of the next few years."

Tosco, which currently has over $ 20 bn in annualised revenues, is the largest independent refiner and marketer of petroleum products in the United States, and is the nation's largest operator of company-controlled convenience stores.

Source: Bridge News via Newspage
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