BP to Finish Work on New Spanish Oil Refinery Unit By Year End

By Nidaa Bakhsh

Nov. 27 (Bloomberg) -- BP Plc, Europe’s second-largest oil company, is expecting to finish work on a new $300 million processing unit at its Castellon refinery in Spain by the end of the year.

A so-called coker unit, with the capacity to produce 20,000 barrels a day of diesel and other fuels, will be “mechanically completed” by the year’s end, Robert Wine, a BP spokesman, said yesterday in a telephone interview from London, where the company is based.

The new unit is expected to go through testing before operations start in the first quarter of next year. Diesel output is expected to rise to about 50 percent of total capacity, from 35 percent, to meet local demand, while fuel oil production will be “eliminated,” BP said in an e-mailed statement.

The Castellon refinery, on Spain’s Mediterranean coast, can process about 120,000 barrels of oil a day into fuels such as gasoline, diesel, and jet fuel, according to BP’s Web site.

Thirty-five percent of Spain’s diesel demand is currently met through imports from Russia or Italy, the BP statement said.

The growing demand for diesel and European Union requirements for lower sulfur in fuels is “forcing costly investment” at processing facilities, Iain Conn, the head of BP’s refining and marketing business, said in a Nov. 25 speech posted on the company’s Web site.

To contact the reporter on this story: Nidaa Bakhsh in London at nbakhsh@bloomberg.net