Texas company planning Eagle Ford refinery

 

A Petrohawk Energy Co. drilling site at the Eagle Ford Shale in McMullen County. (Jake Lacey)

A Petrohawk Energy Co. drilling site at the Eagle Ford Shale in McMullen County. (Jake Lacey)

A North Texas company said Monday it plans to build a 10,000-barrel-a-day refinery in La Salle County in the booming Eagle Ford Shale.

Dave Martinelli, CEO of Worldwide Energy Consortium Inc. of Irving, which will build the plant, said it will refine oil from the shale and sell its fuels in the area. He said the company has plans to build “several” more plants in the region.

He expects the La Salle County plant to begin operating late next year. He said the company has started the initial engineering and permitting phase.

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However, a spokesman for the Texas Commission on Environmental Quality in Austin said a search of its database didn’t show anything about a planned refinery in La Salle County.

“A refinery would require some type of authorization from us and we would have to review the application before we could determine if any type of federal permit was required,” the spokesman said in an emailed statement. “All permits must comply with all applicable state and federal rules.”

The commission is delegated to issue certain federal permits, the spokesman said.

Martinelli said he’s shared his company’s plans for the plant with TCEQ officials in Laredo and with local officials, including La Salle County Judge Joel Rodriguez Jr. Rodriguez was not available for comment Monday.

Martinelli said he’s optimistic that the plant, to be called the Whitetail Refinery, will get the permits it needs to operate as its emissions would fall below certain federal and state thresholds.

“There are certain trip wires on emissions that bring in EPA (Environmental Protection Agency) oversight,” Martinelli said. “We modeled (the plant) as one that would operate under the federal guidelines.”

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The Whitetail plant is expected to cost less than $100 million, he said. Eventually it may be expanded.

“It’s about the investors and available funds,” he said. “We’ll grow as permits allow.”

John Auers, senior vice president of the petroleum and refining consulting firm Turner Mason & Co. in Dallas, said he doesn’t know the details of the project, but making the plant profitable could be difficult.

“The key is demand,” Auers said. The new plant would compete with huge refineries in Corpus Christi that can supply diesel for trucks and equipment in the Eagle Ford area “at a relatively low cost,” Auers said.

“I can’t imagine that the demand situation is such that you can justify building even a small refinery,” Auers said. “You’d be better off moving to crude to Corpus than building a new plant,” he said.

Even a small plant would need a costly unit called a hydrotreater to produce ultra low-sulfur diesel that environmental rules require.

Auers added: “You’re not going to do it (a small plant) for less than a couple million.”

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Martinelli said there are precedents for the construction of smaller plants. In North Dakota, where the Bakken Shale’s oil production has been prolific, construction began on a simple 20,000 barrel-a-day plant in March.

Another small refinery opened in 2008 in Douglas, Wyo., according to the Energy Department.

It has been 30 years and more since the last major, sophisticated refinery opened. A complex refinery began operating in 1977 in Garyville, La.

Locally based Valero Energy Corp.’s complex Corpus Christi plant opened in 1983 on the site of a simple refinery that opened in 1975, the Energy Department said.