Heavy crude from Alberta strengthened for the fourth straight day as refineries in the U.S. Midwest prepared to process more of the thick oil.
Western Canadian Select, a blend of heavy crudes, gained $1.25 to a discount of $23.75 a barrel versus West Texas Intermediate, according to data compiled by Bloomberg. That’s the narrowest discount since Aug. 29.
BP Plc (BP/) yesterday completed the commissioning of new units as part of a modernization project designed to allow its Whiting refinery in Indiana to process more heavy crude. The plant upgraded the largest crude unit and added a new coker, gasoil hydrotreater and sulfur plant.
“Once the coker is online, we expect the refinery to begin a three-month progressive transition to heavy feedstock, reaching full run-rate capacity during the first quarter of next year,” Bob Dudley, BP’s chief executive officer, said during an Oct. 29 conference call.
The Whiting plant is the third major refinery in the Midwest to undergo a makeover to take advantage of cheaper Canadian crude.
ConocoPhillips (COP) added a new coker in 2011 at the 356,000-barrel-a-day Wood River, Illinois, plant now owned by Phillips 66 (PSX) and Cenovus Energy Inc. (CVE) That increased heavy crude capacity by as much as 110,000 barrels a day, according to the company’s website.
Marathon Petroleum Corp.’s Detroit site finished work in 2012 that added a coker and upgraded other units to allow the 120,000-barrel-a-day plant to process an additional 80,000 barrels of heavy crude daily.
Syncrude, a light, sweet synthetic crude produced by upgrading oil sands bitumen in Canada, strengthened by 25 cents to a discount of $2.50 a barrel relative to WTI.
To contact the reporter on this story: Dan Murtaugh in Houston at email@example.com
To contact the editor responsible for this story: Dan Stets at firstname.lastname@example.org