KANSAS CITY, Kan. -- Coffeyville Resources LLC today announced that the its board of directors has approved a $92 million expansion of its wholly owned refinery, Coffeyville Resources Refining & Marketing, and nitrogen fertilizer facility, Coffeyville Resources Nitrogen Fertilizers.

A series of interrelated projects will increase crude oil throughput of the refinery by 15 percent to more than 115,000 barrels per day. Downstream processing is being expanded to accommodate higher and heavier crude inputs. At the nitrogen fertilizer facility, the expansion will boost both ammonia and urea ammonium nitrate production. UAN production will increase significantly, from 650,000 tons to more than one million tons per year.

"Through this expansion, the refinery will be able to meet growing demand in the Midwestern markets," said Jack Lipinski, CEO. "Our fertilizer expansion leverages our low-cost, highly efficient coke gasification process and furthers our position as a major player in the nitrogen fertilizer industry. With the approval of this latest expansion, commitment to our capital program has grown to over $350 million through 2007."

The refinery expansion will be completed in late 2006 and includes:

  • Expansion and revamp of the crude and vacuum units to increase crude capacity and allow the refinery to process heavier crude oils.

  • Revamp of the fluidized catalytic cracking unit that will increase the yield of gasoline and diesel fuel.

  • Delayed coker improvements, which will allow the refinery to process heavier, lower cost crude oils.

  • This expansion complements the current major capital program at the refinery. Already under construction are a new diesel hydrotreater and a new sulfur recovery unit that will allow the refinery to meet Tier II ultra-low sulfur diesel fuel standards. These projects are on schedule for mid-year 2006 completion.

    In addition, construction of a new continuous catalytic reformer, which will increase the production of gasoline and hydrogen used in the production of clean fuels, is scheduled for completion by fourth quarter of 2007.

    Fertilizer facility upgrades include:

  • Expansion of the secondary gasifier to increase hydrogen production, with the additional hydrogen being converted to ammonia. This project is scheduled for completion in July 2006.

  • Addition of ammonium nitrate capacity by the end of 2006.

  • Additional urea capacity by fall 2007.

  • In addition, the nitrogen fertilizer plant, which uses petroleum coke as the feedstock for its gasification process, will benefit from the delayed coker improvements at the refinery. Coffeyville Resources Nitrogen Fertilizers is the only nitrogen fertilizer facility in North America that uses petroleum coke as a feedstock.

    First built in 1906, the refinery has been expanded, both in capacity and complexity, by various owners have throughout its 100-year history. In 1998, the nitrogen fertilizer plant was built adjacent to the refinery complex.

    Coffeyville Acquisitions, LLC, a partnership of GS Capital Partners -- the private equity arm of Goldman Sachs Group -- and private equity investment firm Kelso & Company acquired Coffeyville Resources LLC and its subsidiaries in June 2005.

    Coffeyville Resources LLC is an independent petroleum refiner and marketer, and the low-cost producer and marketer of upgraded nitrogen fertilizer products in North America.

    Coffeyville Resources' group of companies includes Coffeyville Resources Refining & Marketing, LLC, a 100,000 BPD oil refinery in Coffeyville, Kansas; Coffeyville Resources Crude Transportation, LLC, a crude oil gathering system throughout Kansas and northern Oklahoma; Coffeyville Resources Terminal, LLC, a refined products terminal in Phillipsburg, Kansas; Coffeyville Resources Pipeline, LLC; and Coffeyville Resources Nitrogen Fertilizers, LLC, which operates a unique coke gasification-based nitrogen fertilizer plant adjacent to the refinery that annually produces more than 700,000 tons of nitrogen fertilizer products.

    With nearly 475 employees, and headquartered in Kansas City, Kan., Coffeyville Resources generates more than $2.5 billion in annual revenues.

    SOURCE: Coffeyville Resources via Business Wire.