BP’s multi-billion-dollar investment at Whiting refinery in Indiana puts the plant at the heart of the company’s fuels strategy. But, it’s also had a major impact on the local economy and, as BP Magazine discovers, it couldn’t have come at a better time
Whiting refinery in Northwest Indiana has always seemed to have been in the right place at the right time. The BP plant was one part of the financial empire of oil tycoon John D Rockefeller, when it first began producing kerosene and other petroleum products in 1890. Situated on the southern shore of Lake Michigan, in the very heart of America’s bustling industrial Midwest, the refinery prospered for decades, along with nearby Chicago and other cities of the region. While, the past couple of decades have seen rough economic times in northern Indiana, as some of the steel mills and factories were shut down, BP’s Whiting refinery continued making gasoline and other products. And, today, the refinery is thriving, thanks to its location and a multi-billion-dollar investment that will make the plant the keystone of BP’s US fuels strategy for years to come. The Whiting Refinery Modernisation Project (WRMP) saw the completion of commissioning of refinery units in December 2013, with all the major new units associated with the project successfully brought onstream. The reconfigured refinery, located in the hub of a vast network of pipelines and railroads, can now process as much as 80% heavy crude oil from Canada, up from 20% in the past, and this new capability is expected to deliver $1 billion of operating cash flow per year, depending on market conditions. “The Whiting Refinery Modernisation Project is a game changer for Whiting, essentially moving it to process mostly heavy-sour Canadian crude. And it’s going to shift our competitive position dramatically,” says Nick Spencer, vice president of refining. The reconfigured refinery is a key part of BP’s Northern Tier strategy, which also includes operating refineries in Toledo, Ohio and Cherry Point, Washington. “The Whiting project is the foundation of our US fuels strategy,” said Iain Conn, chief executive of BP’s refining and marketing segment. “This refinery has unique flexibility in its ability to access and process crude, demonstrating our commitment to operate feedstock-advantaged Northern Tier US refineries that are tied to strong retail markets.”
A project of historic size
The WRMP team carried out a complex project that was the largest private investment in the history of Indiana. The team, which drew upon the experience of BP employees from all over the world, replaced old operating units with new ones that are safer, more efficient and more capable. It also revamped many of the remaining operating units. This major construction programme was carried out while the refinery remained in operation, a feat that required extensive planning and meticulous execution.
"There are very few places in the world where a project of this scale has been done in an operating refinery."
- Nick Spencer
The BP team had to work through a host of issues that ranged from mundane topics, such as finding parking spaces for thousands of contractors, to complicated construction challenges, such as lifting pieces of equipment weighing hundreds of tonnes over units that were still operating. “We basically built a new refinery inside an operating one” says Reggie Waddell, operations superintendent.
The new processing units
One of the most important and complex tasks the team completed was the reconfiguration of the venerable 12 Pipestill, the refinery’s main crude unit, which fractionates the crude oil into feed streams for further processing in downstream units. And while 12 Pipestill was reconfigured, the team carried out work on three other major units. A state-of-the-art petroleum coker was erected and the old one was decommissioned. The new coker, the second-largest Foster Wheeler coker in the world, can process around 102,000 barrels per day. The unit converts residual oil into lighter naptha, light and heavy gas oils for use in gasoline and diesel production, and petroleum coke, which can be used for power generation and other industrial applications. The project also saw the building of a gasoil hydrotreater that reduces the sulphur, nitrogen, and aromatic hydrocarbons to acceptable levels to allow the subsequent processing of gas oil in Whiting’s catalytic cracking units, where gasoline and diesel is produced. And, the refinery is now equipped with additional sulphur recovery processing capacity that recovers the sulphur in the heavy sour crude. The numbers surrounding the WRMP are impressive, says Spencer: at the peak of activity, there were more than 10,000 contractors working at the site. Meanwhile, 610 kilometres (380 miles) of pipeline have been installed, 50,000 tonnes of steel used, 1,200 pieces of major equipment installed, and 600 shop-fabricated modules used.
tonnes of steel were used
kilometres of pipe were installed
pieces of major equipment installed
The gigantic project required extensive organisation and planning, as the refinery staff had to continue daily operations while construction and demolition was being done at the same time. “It was very intricate. Credit should go to the teams that planned it and could put a new line right next to an operating line and do it safely,” says Ian Somerville, BP project manager, explaining that each day thousands of things had to be done right in order to correctly complete the project. “In live areas there was simply no margin for error,” he says. Jim Shoriak, WRMP project manager, says having a small army of extra workers on the site meant that in addition to finding extra parking space, the team had to provide food and other services. Shoriak says the task was similar to staging a mid-sized sporting event every day of the year. “We got people in and got them out quicker than if they had gone to a football game. At a sporting event, you sit in traffic for two hours, we got everyone out in 15 to 20 minutes.” To help accomplish the daily movement, the BP team arranged for additional police officers to direct traffic on the streets and highways leading into the facility. Shoriak says there was much more to the effort than just logistics and that it was important to instil a strong safety culture in the contractors. “The contractors told us we set a much higher standard than what they were used to working to. When you get a workforce that is not used to being in a refinery, that is when you have to make that extra effort.” Shoriak says the BP leaders told the contractors that it was very important to speak up if they had a concern or saw something that needed attention. “It is all about safety. It is what you do when no one is around that really counts. Will you do the safe thing when no one is watching? Will you look for a hazard when nobody asked you to? That is the best kind of safety to have.”
"This refinery has unique flexibility in its ability to access and process crude, demonstrating our commitment to operate feedstock-advantaged Northern Tier US refineries that are tied to strong retail markets."
- Iain Conn
Impact on the local economy
The WRMP provided a gigantic boost to the economy of the region, says Don Koliboski, economic development director for the Northwest Indiana Forum, a group focused on the economic development of the seven-county region around Whiting. “The national economy took a dip in 2008. That is when the modernisation began, so from an economic standpoint, it saved Northwest Indiana from major distress,” he says, adding that BP’s huge investment in the area encouraged other companies to embark on big capital projects. “There was a ripple effect with other major industries that could use the labour force that was mobilised by the [Whiting] modernisation.” Karen Lauerman, director of marketing and communications for the forum, grew up in the shadow of the refinery, where her great grandfather, grandfather and uncles worked. She says the modernisation served as a catalyst for other businesses, because the BP investment in the refinery demonstrates a commitment to the plant for many years to come. She says more than 40 companies have invested in excess of $350 million in Northwest Indiana since the project began. “They see this as an opportunity to serve the people who work at BP; restaurants have opened, a microbrewery opened. And, we have had growth in manufacturing. They know that BP is here to stay,” Lauerman says. Whiting’s mayor, Joseph M Stahura, says the refinery has always played a large role in the town’s life and continues to do so. “The refinery is our largest taxpayer, our largest land owner, the largest water consumer. It is a huge part of our community in every aspect,” says Stahura, who worked at the refinery for 22 years, when it was owned by Amoco. "They have been great corporate partners with us over the many years. When people think of Whiting, the first thing they think is the refinery.”