Plans are progressing for construction of the first sizable grassroots refinery built in the U.S, in the past 20 years or so.
Williams Energy Ventures, a unit of Williams Cos. Inc., Tulsa, has obtained all required permits for construction of the 50,000 b/d refinery in Arizona. It also received approval from Williams Cos,' board of directors to conduct detailed engineering and marketing analyses and acquire a 392 acre site near Phoenix for the plant (OGJ, Sept. 26, p. 47).
Keith E. Bailey, the parent company's chief executive officer, said additional studies are required before the board will consider final approval of the refinery, which will cost an estimated $450 million and take 30 months to build.
If approved, the refinery will be designed to process heavy California crude and produce gasoline, jet fuel, and diesel for sale in the Arizona area. Output will be flexible to meet product demand patterns.
Construction is expected to require 1,100-1,200 workers. Williams expects the operating plant to employ 179 with a payroll of about $10 million/year.
"The project appears to provide an extremely attractive niche investment opportunity that is certainly worth pursuing further," Bailey said.
"Our liquids pipeline has provided us with a unique perspective on the refining industry for nearly 30 years. This experience, combined with a more detailed analysis of this specific project, will provide us a very high level of confidence when we make a final decision later this year.
"Everything we've seen so far suggests the region provides the attractive balance of an economic, reliable crude supply and a very dynamic fuel market area. If we make this investment, we would expect this new subsidiary-size business to be a significant contributor to our financial results in 1997."
Oil & Gas Journal records show the last U.S. grassroots refinery of sizable capacity was built by ECOL Ltd. at Garyville, La. It started up in autumn 1976 and was promptly purchased by Marathon Oil Co. with an outlay of $400 million, including assumption of ECOL's debts and contractual obligations (OGJ, Sept. 6, 1976, p. 84; Sept. 27, 1976, p. 30). The plant's present capacity is 225,000 b/cd.
Arizona's only refinery is Intermountain Refining Co.'s 5,710 b/cd plant at Fredonia. Its main product is asphalt.
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