Sonhoe awards contracts for £2bn Teesside refinery project

London -  SONHOE Development Co. has selected GE Oil & Gas as a "supplier of choice" for a new heavy oil upgrader on its planned £2-billion refinery project in Teesside. GE will provide reactors, centrifugal and reciprocating compressors, centrifugal pumps and air coolers for the facility under the contract, which is worth around $200 million.

According to GE Oil & Gas, the new plant will upgrade low quality heavy oil into premium quality, ultra low sulphur diesel, kerosene and petrochemical naphtha in the 200,000 bbl/day facility that is scheduled to come on stream by 2014. Sonhoe plans to source the acidic, sulphurous and low API crudes from a number of regions including the North Sea,Latin America, Middle East and West Africa.

“This is a major and important energy infrastructure project in the UK and we have been working with SONHOE for some time to understand their needs and validate the development," said Claudi Santiago, GE Senior Vice President and president and CEO of GE Oil & Gas. "We have a good understanding of its critical success factors and, by entering into a supplier of choice agreement with Sonhoe , we can work together to mitigate risk, support the technical design and achieve schedule advantage in terms of lead-time length and predictability.

The facility will comprise as its major components a 110,000 bbl/day hydro-cracking capability and a gasification complex that will produce over 500 tonnes/day of hydrogen & over 240,000 therms/day of synthetic gas. The upgrader has been designed to process low quality, heavy crude oil at scale into premium distillates for the European market and elsewhere.

“We are privileged that GE is a partner in this major development and we value the technical capability, engineering quality and commercial integrity that GE brings," said Mike True, managing director of Sonhoe. GE has a deep understanding of the fundamentals of the Upgrader project and we look forward to their continued support and contribution to its success.”

Meanwhile, Sonhoe has signed a heads of agreement for a license with Chevron Lummus Global LLC (CLG) for a new grassroots hydroprocessing complex including three Isocracking units and one new gasoil Isotreating unit to be built in the upgrader at Teesside.

CLG’s hydroprocessing technology will be embedded at the heart of the facility and will "ensure high levels of performance and operational and financial stability for all stakeholders associated with the development,” according to Howard Simons, Sonhoe technical director.

The Isocracking units are designed for greater than 85% conversion of straight run vacuum gasoils, applying CLG’s two-stage Isocracking technology, which is designed to deliver high yields of premium quality diesel and kerosene. The complex will also include a gasoil Isotreating unit designed for 99% conversion of straight-run and cracked atmospheric gasoils and light vacuum gasoils to premium quality diesel and kerosene. The reaction products will be fractionated in a combined fractionation section designed by CLG.

According to CLG, the complex will help Sonhoe to achieve its strategy to convert heavy crude oils into ultra-low sulphur diesel for the European market. The design, it  said, is based on existing operating plants and the basic engineering design is due for completion by the end of 2008, with start-up scheduled for summer 2014.

CLG licenses refining hydroprocessing technologies and catalyst systems worldwide, and is a 50-50 joint venture between Chevron USA Inc. - a wholly owned subsidiary of Chevron Corp, and Lummus Technology - a CB&I Company.