UPDATE 1-BP's Whiting refinery ramp-up timetable slips into 2014
(Adds coker restart next month, BP and analyst comments)
LONDON Oct 29 (Reuters) - BP Plc said on Tuesday that its upgraded 405,000 barrel per day (bpd) Whiting refinery in Indiana will not reach full production until the first quarter of 2014, an apparent slippage in the ramp-up timetable.
Problems with construction of a coking unit as part of the $4 billion revamp of the refinery were reported by Reuters in September.
"We will progressively introduce heavy feedstock once the coker is operational during the fourth quarter, and expect to achieve full run-rate capacity during the first quarter of 2014," the company said.
It said the project "remains on track to commission the remaining new units associated with the investment by the end of the fourth quarter." The company made its statements on the Whiting refinery in its release on quarterly results.
BP said the 100,000 bpd coker unit, crucial for a refinery seeking to process cheaper and heavier Canadian crude, will come on stream in November.
"This statement is consistent with what we have always said about the project. Completion before year-end," a U.S.-based spokesman for BP said in an email.
But analysts said that in previous briefings BP has said Whiting would deliver a full year of profits in 2014.
"Whiting looks to have slipped slightly, with BP now talking about full capacity to be reached in Q1 2014. Prior guidance had been for 2014 as a 'full-year' of profitability for the project," Tudor Pickering Holt & Co said in a note.
Once the upgrade is complete, heavy sour Canadian crude oil will constitute 80 percent of Whiting's crude slate, BP said.
The Canadian grade now trades at a heavy discount of about $30 per barrel to the U.S. benchmark futures contract, but BP said the difference is likely to narrow as Whiting increases its consumption of oil sands crude.
"One of the reasons why you see these big WTI-heavy spreads right now is because, actually, that oil isn't being soaked up yet by Whiting. As Whiting comes on stream we would expect that differential to come down quite significantly," Chief Financial Officer Brian Gilvary said during a conference call.
While BP will not reveal the WTI-Canadian spreads on which the Whiting modernisation project was based, Gilvary said the assumption was "certainly a number well below the 30-odd dollars a barrel."
The upgraded refinery is one of the company's key profit drivers for the future, and its output is closely watched by traders for its potential impact on the price of crude oil in North America. (Reporting by Andrew Callus in London; Additional reporting by Sabina Zawadzki in New York and David Sheppard in London; editing by Keiron Henderson and Leslie Adler)
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