Sonhoe £2bn refinery still on track

Middlesbrough, UK - Sonhoe Development Co. remains on track with its plans to establish a £2-billion crude oil processing plant in the Tees Valley remain on schedule, according to a joint statement issued the company and Tees Valley Regeneration. The plant is to process heavy crude oil - producing millions of barrels of diesel and naphtha.

“Commercially sensitive due diligence continues behind the scenes and the team behind the plant is working flat out with Tees Valley Regeneration to finalise the scheme, Neil Kenley, strategic investment and marketing director for Tees Valley Regeneration. “Despite the global economic downturn the fundamentals of the project still stack up."

Millions of barrels of heavy crude are being extracted from oil wells across the globe and millions of barrels of heavy crude remain in the ground, Kenley continued: “There is a world-wide demand for diesel which continues to increase on an annual basis. There is an estimated 50 million tonne per annum shortage of diesel forecasted for Europe by 2015, this Tees Valley facility would make up about 7-10% of this deficit.”

Sonhoe plans to build a £2-billion crude oil processing facility in the Tees Valley in the North East of England. The project would represent one of the largest single investments in the process industry in the UK in the last 20 years, said Sonhoe - a London-based company that specialises in the development of hydro-carbon processing and infrastructure facilities.

The facility has been designed to process 200,000 barrels a day of heavy crude oil into high quality, low sulphur diesel, petrochemical feedstock naphtha and kerosene for use in the UK or for export. The plant also incorporates the production of hydrogen and would be one of the largest hydrogen producing plants in Europe, said a 10 Oct company statement.

Sonhoe has identified brownfield sites in and around the Wilton International site to locate the main processing units, storage and logistics facilities and the creation of new marine facilities on the river Tees. The development timescale through to completion is five to seven years. The company's next stage is to enter into front end engineering design (FEED) with associated activities to progress permissions, commercial arrangements for crude oil supply and infrastructure preparation.

The development, said Sonhoe, could create up to 400 core employment positions on site and 1500 associated jobs once the plant is operational, according to London-based Sonhoe. The project has backed from the Department for Business, Enterprise and Regulatory Reform, UKTI, One NorthEast, Tees Valley Regeneration and Redcar and Cleveland Borough Council as well as industrial companies in the area.

The plan "is the culmination of several years of planning and outstanding support from the area," Sonhoe's management has previously stated. "The fundamentals for this facility are very strong – the technology is proven and has been demonstrated to work in many other facilities around the world."

The project has also received support from SABIC UK Petrochemicals, which is currently establishing world-scale polyolefin production facilities at the Wilton site.