Planned refinery is 'enormous,' industry expert says
By Michele Linck Journal staff writer | Posted: Saturday, June 16, 2007
A spokesman for an oil industry association said Friday that the oil refinery planned by Hyperion Resources of Dallas would be "an enormous plant."
Hyperion announced Wednesday that a site in Union County, S.D., is a finalist among "a couple" of others in the Midwest for a planned oil refinery with a capacity to process 400,000 barrels of oil a day. Until then, the project was a tightly held secret nicknamed "Gorilla" by those outside a small circle of officials who signed confidentiality agreements before being briefed on it.
John Kerekex, spokesman for the American Petroleum Institute of Washington, D.C., said he is not familiar with Hyperion Resources and that the company is not an institute member.
Kerekex said the processing capacity of 400,000 barrels of oil per day puts Hyperion's proposed refinery on a footing with BP' Whiting Refinery in Indiana, which he called "an enormous plant."
"That's the kind of scale you need if you're going to get into this business," he said.
Between a yearslong permitting process and four-year-long construction schedule, the refinery could be a decade from production even without challenges already planned by a group of local residents.
The BP Whiting refinery is on the shore of Lake Michigan near Chicago and is the eighth largest in the United States, according to its Web site. It said that on an average day, the facility produces enough products to fuel 430,000 cars, more than 10,000 farm tractors, 22,000 semitrailers and 2,000 commercial jetliners and fill 350,000 propane cylinders. And it makes enough asphalt each year to pave a road 20 feet wide and 4 inches deep around the Earth, the site says.
Kerekex said refineries follow a seasonal schedule. One in South Dakota would probably produce gasoline in the summer, diesel fuel during the spring planting and fall harvest times and heating oil in the winter. "It would make the whole product slate, propane to asphalt and everything in between," he said.
Kerekex said Hyperion has likely identified a big market in the Midwest. "That would certainly help the supply logistics in the Midwest. You seem to run out a lot," he said. "You're an importer, and you're vulnerable to whatever's available."
Hyperion described its planned facility as using 400,000 barrels of oil a day to produce ultralow-sulfur gasoline and ultralow-sulfur diesel fuel. Kerekex said all except the very smallest refineries are on a required schedule toward producing only ultralow-sulfur fuels, which burn cleaner some current feuls. He said the United States' sulfur specifications are "extremely low" and that a new refinery would probably be required to produce at those specs from the start.
Kerekex said the sulfur extracted from oil is sold off as a chemical feedstock used to make other materials.
"There's little waste at a refinery," he said. "If you put 100 barrels into a refinery, 105 barrels come out." The byproducts include natural gas, asphalt and petroleum coke. In the case of Hyperion's "green" refinery, it would use the coke itself to produce energy to help power the refinery and reduce its emissions.
Tar sands oil likely source
Hyperion said Wednesday it would get oil for the refinery using a pipeline from Canada. Kerekex said that almost certainly means the company would use "tar sands crude" oil from Canada's Alberta tar sands fields. Those fields have been estimated to contain 335 billion barrels of retrievable oil, a near second to Saudi Arabia's reserves, according to Alberta's government energy Web site. At extraction rates anticipated in 2015, the fields would take 400 years to deplete, the site said.
"As long as the price is at a certain level, it's economical to get it out of there," Kerekex said. "(The industry) is building a lot of infrastructure in the United States to get that to Midwest markets. He cited a recent extensive expansion and retrofitting of the BP Whiting refinery, and improvements at refineries in St. Louis and Detroit as examples of expansions that will use the tar sand crude.
He said those refineries can use that oil "very effectively." He said it's cheaper than the Arabian crudes and easier to work with than "very heavy" Venezuelan crude oil.
`Gorilla' is still a bit inscrutable
Despite Wednesday's revelation of the long-secret identity of the "Gorilla" project as a "green" oil refinery/energy center planned by Hyperion Resources Inc., of Dallas, little is being revealed about the company behind it.
The project was dubbed Gorilla by those not in the know as the company optioned thousands of acres of land in Union County, South Dakota before identifying itself to more than a handful of leaders, who signed confidentiality agreements.
Hyperion said Wednesday that it has obtained options on 5,000 acres of land in Union County east of Interstate 29 and north of Elk Point and that the area is a finalist for the refinery among "a couple" other sites in the Midwest.
Hyperion, a privately-held corporation, has identified its core business in the United States as gas and oil production, and said it also deals in real estate, agriculture and other ventures. Company spokesman Eric Williams said it's not divulging more than that at this time.
"Hyperion's a private company and they’re not gong to release many details on that," he said to a request for information on its history and current enterprises. It is not clear what experience, if any, the company has with refining oil, although brief backgrounds on five of its executives, released by Hyperion on Wednesday, show two had experience in oil refining prior to joining the company.
Records filed with the Texas Secretary of State's office show Hyperion Resources was incorporated in 1990, has no subsidiaries, and that its parent company is Legacy Investments Inc., was also incorporated in 1990. Albert Huddleston, of Dallas, is listed as the CEO of both corporations.
"More info will come out at permitting time," Mitch Krebs, a spokesman for the governor's office said Friday. "You've got to remember this is a private company. The governor's office won't speak for it."
Hyperion announced Wednesday that a site in Union County, S.D., is a finalist among "a couple" of others in the Midwest for a planned oil refinery with a capacity to process 400,000 barrels of oil a day. Until then, the project was a tightly held secret nicknamed "Gorilla" by those outside a small circle of officials who signed confidentiality agreements before being briefed on it.
John Kerekex, spokesman for the American Petroleum Institute of Washington, D.C., said he is not familiar with Hyperion Resources and that the company is not an institute member.
Kerekex said the processing capacity of 400,000 barrels of oil per day puts Hyperion's proposed refinery on a footing with BP' Whiting Refinery in Indiana, which he called "an enormous plant."
"That's the kind of scale you need if you're going to get into this business," he said.
Between a yearslong permitting process and four-year-long construction schedule, the refinery could be a decade from production even without challenges already planned by a group of local residents.
The BP Whiting refinery is on the shore of Lake Michigan near Chicago and is the eighth largest in the United States, according to its Web site. It said that on an average day, the facility produces enough products to fuel 430,000 cars, more than 10,000 farm tractors, 22,000 semitrailers and 2,000 commercial jetliners and fill 350,000 propane cylinders. And it makes enough asphalt each year to pave a road 20 feet wide and 4 inches deep around the Earth, the site says.
Kerekex said refineries follow a seasonal schedule. One in South Dakota would probably produce gasoline in the summer, diesel fuel during the spring planting and fall harvest times and heating oil in the winter. "It would make the whole product slate, propane to asphalt and everything in between," he said.
Kerekex said Hyperion has likely identified a big market in the Midwest. "That would certainly help the supply logistics in the Midwest. You seem to run out a lot," he said. "You're an importer, and you're vulnerable to whatever's available."
Hyperion described its planned facility as using 400,000 barrels of oil a day to produce ultralow-sulfur gasoline and ultralow-sulfur diesel fuel. Kerekex said all except the very smallest refineries are on a required schedule toward producing only ultralow-sulfur fuels, which burn cleaner some current feuls. He said the United States' sulfur specifications are "extremely low" and that a new refinery would probably be required to produce at those specs from the start.
Kerekex said the sulfur extracted from oil is sold off as a chemical feedstock used to make other materials.
"There's little waste at a refinery," he said. "If you put 100 barrels into a refinery, 105 barrels come out." The byproducts include natural gas, asphalt and petroleum coke. In the case of Hyperion's "green" refinery, it would use the coke itself to produce energy to help power the refinery and reduce its emissions.
Tar sands oil likely source
Hyperion said Wednesday it would get oil for the refinery using a pipeline from Canada. Kerekex said that almost certainly means the company would use "tar sands crude" oil from Canada's Alberta tar sands fields. Those fields have been estimated to contain 335 billion barrels of retrievable oil, a near second to Saudi Arabia's reserves, according to Alberta's government energy Web site. At extraction rates anticipated in 2015, the fields would take 400 years to deplete, the site said.
"As long as the price is at a certain level, it's economical to get it out of there," Kerekex said. "(The industry) is building a lot of infrastructure in the United States to get that to Midwest markets. He cited a recent extensive expansion and retrofitting of the BP Whiting refinery, and improvements at refineries in St. Louis and Detroit as examples of expansions that will use the tar sand crude.
He said those refineries can use that oil "very effectively." He said it's cheaper than the Arabian crudes and easier to work with than "very heavy" Venezuelan crude oil.
`Gorilla' is still a bit inscrutable
Despite Wednesday's revelation of the long-secret identity of the "Gorilla" project as a "green" oil refinery/energy center planned by Hyperion Resources Inc., of Dallas, little is being revealed about the company behind it.
The project was dubbed Gorilla by those not in the know as the company optioned thousands of acres of land in Union County, South Dakota before identifying itself to more than a handful of leaders, who signed confidentiality agreements.
Hyperion said Wednesday that it has obtained options on 5,000 acres of land in Union County east of Interstate 29 and north of Elk Point and that the area is a finalist for the refinery among "a couple" other sites in the Midwest.
Hyperion, a privately-held corporation, has identified its core business in the United States as gas and oil production, and said it also deals in real estate, agriculture and other ventures. Company spokesman Eric Williams said it's not divulging more than that at this time.
"Hyperion's a private company and they’re not gong to release many details on that," he said to a request for information on its history and current enterprises. It is not clear what experience, if any, the company has with refining oil, although brief backgrounds on five of its executives, released by Hyperion on Wednesday, show two had experience in oil refining prior to joining the company.
Records filed with the Texas Secretary of State's office show Hyperion Resources was incorporated in 1990, has no subsidiaries, and that its parent company is Legacy Investments Inc., was also incorporated in 1990. Albert Huddleston, of Dallas, is listed as the CEO of both corporations.
"More info will come out at permitting time," Mitch Krebs, a spokesman for the governor's office said Friday. "You've got to remember this is a private company. The governor's office won't speak for it."
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Aaron wrote on Jun 18, 2007 1:38 PM: