Sun Co. will restructure its Yabucoa, P.R., refinery to improve its efficiency and profitability.
The major change will be to switch from processing crude oil as a feedstock to processing purchased intermediate feedstocks such as vacuum gas oil and reduced crude.
The refinery, which is part of Sun's Lubricants business unit, currently processes 75,000 b/d of crude oil.
The company operates it principally to produce lubricant base oils, but in its current configuration, the plant also produces more than 50,000 b/d of fuels products.
In recent years, weak fuels products margins, especially for residual fuel, have reduced overall profitability at the refinery.
Restructuring rationale
Sun Lubricants Vice Pres. Bill Thompson said that the change in feedstock will eliminate much of the refinery's fuels production and allow it to focus on production of the more-profitable lubricant base oils.
"The changes will be made during the first quarter of 1997, and they will make the refinery more competitive and significantly improve its profitability," he said.
"Following the restructuring, the refinery will process 20,000-30,000 b/d of intermediate feedstock, but the volume and quality of the lubricant base oil production will not be affected," Thompson said.
Recent capital improvements have increased the production capacity of Yabucoa's high-quality, hydrotreated base oils to more than 9,000 b/d.
Process units shuttered
Thompson said that some of the processing units in the refinery would be shut down as a part of the change. These include the atmospheric crude tower, the gasoline reformer, and the gas oil desulfurizer.
He said more than 75 jobs would be eliminated as a result of these closings and related efficiency improvements. The plant currently employs 340 people.
The fuels now produced at the refinery-gasoline, jet fuel, distillate fuel, and residual fuel-are sold on the island.
"We will meet our obligations under our current contracts with fuels customers utilizing products we acquire elsewhere," Thompson said, "and we hope to maintain our on-island marketing presence in the future."
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