Black and Yellow Wax Fueling Refinery Expansion
Heavy Crude Poses Challenges, Creates Opportunities
Black and yellow waxes are thick crude oils with a higher paraffinic content than most crude oils found in North America. These waxy crudes are viscous and have a high pour point, which means they become semi-solid at lower temperatures.
Refining waxy crudes presents some challenges. Although black wax is well suited for making gasoline, lubricants, and diesel fuel, refining must occur close to the source. Because waxy crudes solidify quickly, effective transport and handling of these heavy oils has been problematic.
The Uintah Basin in eastern Utah contains significant black and yellow wax crude oil reserves. Salt Lake refineries can purchase these waxy crudes at a discount since they are located relatively close to the Basin, reducing the transport distance. Advancements in technology now make it possible for local refineries to process black and yellow wax in fluid catalytic cracking units (FCCUs), which break the wax’s large molecules into smaller ones that can be transported more easily through pipelines. As a result, refining heavy crudes has become more economically attractive.
A 10-year agreement between Holly and Newfield Exploration to deliver 20,000 barrels per day (bpd) to the refinery will provide Holly with a consistent supply of waxy crudes beginning in 2014. Holly also hopes to capitalize on the increased market for its petroleum products in Cedar City and Las Vegas resulting from the recent startup of the UNEV oil pipeline.
The Utah legislature passed a concurrent resolution during its 2012 session that encouraged the development of new technologies and facilities to enhance both the production and value of Uintah black wax. This resolution reinforced Utah government support for increases in waxy crude production and refining in the state.
In 2007, the Division of Air Quality approved modifications to Holly's permit, allowing it to modernize its refinery and expand its processing capacity. At that time, Holly anticipated it would be increasing its production of higher sulfur heavy crudes. Now that processing the low sulfur black and yellow wax from the Uintah Basin has become economically feasible, Holly proposes to revise some of these permitted changes to accommodate this increase in its supply of black wax and process these lower sulfur crudes more effectively.