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Wednesday, November 12, 2008

State's only oil refinery still seeking supply partner

From an article by Shelley Nelson posted on RiverTowns.net:

Plans for a nearly seven-fold expansion of Murphy Oil's Superior refinery are on hold.

The company, headquartered in El Dorado, Ark., is putting the brakes on detailed design engineering until it can find a partner to provide a reliable source of bitumen crude from the Canadian oil sands to feed the expanded facility.

The proposed project would increase the refinery's processing capacity from 35,000 barrels of crude oil per day to 235,000 barrels per day, making the Superior refinery the largest rather than the smallest of Murphy Oil's three refineries worldwide.

The company also operates a 120,000 barrel-per-day refinery in Meraux, La., and a 108,000 barrel-per-day refinery in Mill Haven, Wales.

The refinery is the only oil refinery in the state.

If it happens, the $6 billion investment - the largest in Wisconsin history - could create 300 permanent jobs and 3,000 to 4,000 construction jobs.

"We've beaten down doors trying to find a partner for the project," said Jim Kowitz, interim manager of the Superior refinery. "We have not come up with a partner yet."

The company needs a partner to ensure a crude supply from the oil sands in Alberta, Canada, for the expanded facility. However, with crude prices hitting record highs, Murphy Oil has found no takers for the partnership.

"With dropping crude prices - if demand stays up - it may look more favorable for Canadian producers to invest in," Kowitz said. " When crude is $140 a barrel, they're making lots of money. When crude is $60 a barrel, they're not making near as much, and they might be interested in spending money to get into the U.S. fuels market rather than just be a crude supplier. That's our hope. If crude stays down for awhile, our project will look more attractive again."

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