Farmland Industries, Kansas City, Mo., will permanently close its 27,500 b/d Phillipsburg, Kan., refinery because of lack of profits from asphalt sales and the need for environmental upgrading.
The 51 year old plant will shut down by Apr. 30, 1992.
"Our profitability at Phillipsburg is almost totally dependent on the value of the asphalt by-product we produce," said Gary Morrison, vice-president of Farmland petroleum operations.
"With an unfavorable spread between the cost of crude oil and the price for asphalt, we have found it impossible to achieve a return from the operation."
In addition, recently enacted federal Environmental Protection Agency standards for low sulfur fuels and air quality would require large capital outlays at the refinery.
"There is just no way to justify additional capital investments at a facility where profitability is so doubtful," Morrison said.
Amoco Oil Co. last month cited the high cost of environmental compliance as one of the reasons for the planned closure of its 40,000 b/d Casper, Wyo., refinery (OGJ, Oct. 21, p. 41).
The Phillipsburg refinery began operations in 1940. It was closed in late 1982 because of difficult economic conditions in the petroleum industry and reopened a year later at a production rate of about 7,500 b/d, mainly as a supplier of asphalt.
A loading terminal at the plant will remain open to serve Farmland refined fuel customers.
The Plainville, Kan., gathering system also will continue operations with crude oil being transferred to Farmland's 62,000 b/d Coffeyville, Kan., refinery.
Morrison said Farmland will try to transfer Phillipsburg workers to other company sites or help them find other jobs.
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