The facility, owned by Texas-based Hyperion Resources Inc., will have the capacity to process 400,000 barrels of oil per day. It will process crude imported from Canada, the largest foreign oil supplier to the United States. Hyperion is planning to break ground on the project in 2010.
Located in South Dakota's Union County, the $8 billion project is estimated to create 4,500 construction jobs and 1,800 permanent jobs, according to the company. The 100,000 or so voters in the county approved it by a margin of 58% to 42%.
According to the National Petrochemical and Refiners Association, the project represents the first major refinery the United States to be built since 1976, when a 245,000 barrel-a-day refinery was built by Marathon Petroleum Co.
So they estimate that the refinery will cost $20,000 per barrel of crude oil per day, while refiners are selling at a $5,000 equivalent on Wall Street. Now Saudia Arabia says it will expand refinery capacity:
Saudi Arabia, through its state-owned oil company Saudi Aramco, is planning to expand its refinery capacity by nearly 80% in five years, in part by signing deals with foreign oil majors including COP, TOT, XOM and SNP.
Much of that new capacity will be aimed at turning the kingdom's reserves of heavy crude oil, which is less desirable and is sold at discount to premium light crude, into gasoline and other petroleum products for shipment to Europe and Asia.
The big multinational oil companies, Chevron, Exxon and Conoco, that pull backed the last few weeks, rebounded yesterday. They can probably go back to new highs with the increase in bubbling crude.