Tesoro advances projects at Anacortes refinery

Tesoro Corp. plans to move forward with two complementary projects to enhance production of cleaner products at its 120,000-b/d Anacortes, Wash., refinery, about 70 miles north of Seattle.

The projects, now approved by the company’s board, include a $90 million naphtha isomerization project as well as the previously announced $300 million mixed xylenes project (OGJ Online, July 21, 2014), Tesoro said.

Based on its current market outlook, the company said it expects the isomerization and mixed xylenes projects will generate competitive returns of about 25% and 20%, respectively.

Designed to comply with upcoming reduced-sulfur gasoline regulations, the newly announced naphtha isomerization project, which is scheduled for start-up in 2018 pending permitting, also will reduce gasoline production costs, the company said.

The mixed xylenes project, first announced in July 2014 at a capital cost of $400 million, will involve gathering intermediate feedstock, primarily reformate, from its West Coast refining system, to enable the Anacortes plant to increase its recovery of mixed xylenes.

The scope of the mixed xylenes project remains unchanged from July, despite the revised $300 million cost estimate, Tina Barbee, Tesoro spokeswoman, told OGJ via e-mail.

“The $400 [million] announced last July included the isom project, as the two are complementary,” Barbee said, adding that the project still is designed to recover 15,000 b/d of mixed xylenes.

Tesoro said the mixed xylenes project should help both to increase the competitiveness of and support additional growth in its Washington-based business amid logistic-enable trade possibilities to destinations in Asia-Pacific that have resulted from reduced freight costs, increased Asian demand for naphtha, and expansion of the company’s own trading activities in Asia-Pacific.

Mixed xylenes recovered at Anacortes mostly will be exported to destinations in Asia-Pacific, where regional demand is a primary driver in the global xylene market’s annual growth rate of about 5% to 7%, Tesoro said previously.

Subject to permitting, the mixed xylenes project remains on schedule for start-up in 2017.

Contact Robert Brelsford at [email protected].