Northern Tier seeking more flexible crude runs at Minn. plant

HOUSTON Tue Aug 5, 2014 3:15pm EDT

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HOUSTON Aug 5 (Reuters) - Northern Tier Energy Inc has ordered a pair of desalting units to add flexibility for its Minnesota refinery to increase runs of more profitable types of crude oil, Chief Executive Dave Lamp told analysts on Tuesday.

The company also will conduct planned work on a gas oil hydrotreater in October, he said.

Lamp said the replacement of two older desalting units will allow the 89,500 barrels-per-day St. Paul Park, Minnesota, refinery to reduce Canadian synthetic crude in favor of North Dakota Bakken or Canadian heavy crude. The refinery's overall capacity would remain the same.

Currently the refinery is locked into a certain volume of synthetic crude, while Canadian heavy and Bakken crudes are more profitable, Lamp said during the company's quarterly earnings call.

The upgrade also will allow the refinery to reduce crude unit temperatures to make more ultra-low sulfur diesel crude, he said.

"There's kind of a mixed incentive here," Lamp said.

The desalting units are among several projects the company is evaluating that will, all together, cost less than $100 million, he said.

The desalter replacement would take place before the end of 2015. "We have them on order already, it's a question of when we tie them in," he said.

Western Refining Inc last year acquired a controlling 38.7 percent stake in Northern Tier.

(Reporting By Kristen Hays)

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