* Conoco prepares to start up new CDU at Bayway
* Planned 45-day work underway at the refinery
* Gasoline prices rally on reduced NY Harbor supply
By Janet McGurty
NEW YORK, Sept 23 (Reuters) - ConocoPhillips (COP.N) has started 45 days of work at its 238,000 barrel per day Bayway refinery in Linden, New Jersey, ahead of the start-up of a new crude distillation unit next month, a source familiar with refinery operations said on Thursday.
The size of the new unit at the refinery was not immediately known but the source said that it “dwarfs” the old one. Gasoline prices rallied on the prospect of reduced supply from the plant, which boasts a large 145,000 bpd gasoline-making fluid catalytic cracking unit.
Conoco has incorporated planned work on the reformer, the heavy oil upgrader and other units and piping into the start-up of the new unit, the source said. The work started this week.
A ConocoPhillips spokesman declined to comment on the work.
The cost of the new unit, which was first announced in 2008 when ConocoPhillips pledged to spend $7 billion in downstream investments over five years, is about $100 million.
Included in the work at Bayway, the northernmost refinery on the U.S. East Coast, is a new CO boiler, the third at the facility. The boiler was expected to start up in 2011.
Built in early 1900s by Standard Oil of New Jersey, the refinery — nicknamed “the gasoline machine” — can exert an outsized influence on the New York Mercantile Exchange futures market as it is located near New York Harbor, the delivery point for settling the exchange’s RBOB gasoline and heating oil futures contracts. (Editing by Walter Bagley)