Somerset refinery operational; first oil processed at site in 3 years

SOMERSET, Ky. (Feb. 6, 2013) — Overhaul of Continental Refining Co.’s southern Kentucky crude motor oils refinery (U.S. Refinery #5113) is complete, and it is now processing crude oil and high-quality finished fuel products.

Oil refining resumes in southern Kentucky with the restoration and management turn-around of an 80‐year-old refinery in Somerset, Ky. Continental Refining Co. is one of only 150 refineries in the United States and is the closest refinery for crude oil producers within a 170‐miles radius.

The 80-year-old Somerset refinery — purchased late in 2011 and restored last year — is one of only 150 in the United States. It is one of two refineries in Kentucky.

The overhaul was developed by Continental’s management team and carried out “by highly skilled and experienced regionally based contractors familiar with such undertakings,” the company said in a news release.

Key updates to the Somerset refinery include a new flare system and other improvements to ensure the safe and consistent production of high-value products, Continental said.

“The replacement value of the facility is in excess of $70 million, with $10 million slated for increased throughput and conversion projects for the next two years and up to $60 million over the next five years,” the news release said.

“The credit for this turn around goes 100 percent to the employees, suppliers and supporters of Continental Refining Co.,” said Demetrios Haseotes, CEO and president of Continental.

Demetrios Haseotes, CEO of Menands, N.Y.-based Hemisphere Management Corp., bought a boutique refinery in Somerset in December 2011 for $1.17 million and spent another $10 million to put it back in operation. Photo by Ken Shmidheiser

The plant is projected to be running at full capacity of 5,500 barrels per day in six months. Priorities for the next six months include increasing efficiency and conversion by reducing bottlenecks and expanding crude oil supply from regional producers and hiring more employees to support expanding capacity.

In preparation for regulatory compliance, CRC is designing and installing a benzene stripping operation at the Somerset refinery by 2015, while also evaluating an additional hydrotreater and Hydrocracker. The company is taking an aggressive approach towards upgrading the facility to run heavier feedstocks and achieve a 90 percent high-value finished product conversion which will be achieved by further processing of entire barrel. The company intends to leverage its primary refining assets to find a partner for additional natural gas liquids processing, Haseotes said.

The refinery added 34 jobs in Somerset, and estimates that 200 indirect jobs will be created in the region.