Hess New Jersey refinery to add $45 million in smog controls

Wed Apr 25, 2012 2:58pm EDT

(Reuters) - Hess Corp (HES.N) has agreed to pay an $850,000 civil penalty and spend more than $45 million on new pollution controls to resolve Clean Air Act violations at its 70,000 barrels-per-day refinery in Port Reading, New Jersey, the U.S. government said on Wednesday.

The controls will cut nitrogen oxide emissions and other air pollution, and the Department of Justice said it was the 31st such agreement with refineries across the United States.

The state of New Jersey actively participated in the settlement with Hess and will receive half of the civil penalty, the U.S. government said in a statement.

In response to an analyst's question during the company's first quarter earnings call on Wednesday, CEO John Hess said that the refinery produces earnings, but no profits right now, due mainly to market conditions.

There are no plans to exit that business, he added.

The New Jersey refinery does not run crude oil. Rather, it is a fluid catalytic cracking unit (FCC) with associated downstream units used to make predominantly gasoline and distillates.

According to U.S. Energy Information Administration data, the refinery's primary feedstock is very low sulfur straight-run residual fuel oil sourced from the Skikda refinery in Algeria. Hess imported roughly 50,000 bpd of this material from Algeria in January 2012, the latest month for which data is available.

The Port Reading plant was shut for maintenance in early February and returned to service on February 18.

In late February Hess and joint-venture partner Petroleos de Venezuela permanently shut their 350,000 bpd Hovensa LLC refinery in the U.S. Virgin Islands as the plant was a perennial money-loser.

(Reporting by Braden Reddall in San Francisco and Jeffrey Kerr in New York; editing by Carol Bishopric and Alden Bentley)

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