Frontier puts positive spin on Cheyenne refinery fire
The late July fire at Frontier Oil’s Cheyenne refinery has been problematic for the company, but its leadership does not see the incident as having a long term effect on Frontier’s overall bottom line.
"We suffered a recent setback in Cheyenne as a result of a fire near our crude unit," said Mike Jennings, chairman of Frontier. “Our third quarter production and costs will reflect this outage, which is expected to last approximately two to three weeks. Despite this event, our Cheyenne refinery has been delivering on its cost reduction and yield improvement goals. Still ahead of us is the completion of Cheyenne's LPG recovery project, which is scheduled to come online in mid-2011."
Looking further into his crystal ball, Mr. Jennings sees expanded coking operations on Frontier’s frontier.
"On a macro level, we are seeing increases in US and Canadian crude production, as well as completion of line fill injections for new pipeline capacity. As a result of these and other fundamentals, heavy crude differentials have widened to the point that coking economics are once again attractive at both Frontier refineries,” Mr. Jennings said. “Overall U.S. gasoline and diesel demand continues to grow, albeit slowly, and we believe that refinery margins will follow this slow but steady recovery in the general economy."
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