UPDATE 1-Cheyenne refinery to reach full rates -Frontier

NEW YORK Thu May 5, 2011 1:22pm EDT

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NEW YORK May 5 (Reuters) - Frontier Oil Corp FTO.N said on Thursday its 52,000 barrel-per-day Cheyenne, Wyoming, refinery will reach full utilization rates this week after completion of the turnaround on an alkylation unit.

The company also said it is considering to tie-in its LPG recovery project at the refinery, possibly by early July, after accounting for profit losses as gasoline crack spreads continue to strengthen.

Frontier expects it will lose about 80,000 to 90,000 barrels per day of gasoline production during the tie-in, which it expects to last for a few days, Frontier spokeswoman Kristine Boyd said.

Gasoline crack spread at the refinery were around $19 a barrel in April and $25 in since the start of May, Boyd said.

Frontier will spend $28 million on the completion of the LPG project, according to transcripts of its first-quarter earning call. (Reporting by Selam Gebrekidan; Editing by Lisa Shumaker)

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