Jacobs Engineering Keeps a Hand in U.S. Refining with $1.6 Billion in Active Projects

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Researched by Industrial Info Resources (Sugar Land, Texas)--Jacobs Engineering Group Incorporated (NYSE:JEC) (Dallas, Texas) is playing a major role in the development of ethylene and other chemical-related projects, particularly along the U.S. Gulf Coast, but that does not diminish the engineering, procurement and construction (EPC) provider's work in the Petroleum Refining Industry. Industrial Info is tracking nearly $22 billion in active projects involving Jacobs in the U.S. alone. While refining projects in the account for less than 10% of this total investment value (TIV), they make up the bulk of projects set to begin construction this quarter.

Click on the image at right for a graph detailing active projects involving Jacobs in the U.S. Petroleum Refining Industry, by state or territory.

The largest of the refining-related project in the U.S. to feature Jacobs as an engineer and that are set to begin construction this quarter is Husky Energy Incorporated's (TSX:HSE) (Calgary, Alberta) $27 million upgrade to its refinery in Superior, Wisconsin, which involves rebuilding a 38,000-BBL/d crude and vacuum unit and 11,000-BBL/d fluid catalytic cracking unit (FCCU). The same refinery was damaged by a tank explosion last year that injured 11, and the upgrade had to be pushed back more than two years from its original start date. For more information, see Industrial Info's project report.

Jacobs also is preparing for a trio of upgrades at Royal Dutch Shell plc's (NYSE:RDS.A) (The Hague, Netherlands) Puget Sound Refinery in Anacortes, Washington. The refinery incurred a brief, unplanned shutdown last quarter, following a pipeline rupture. Upgrades set for this quarter, which are likely to begin in March, include:

• $12 million fluid catalytic cracker unit (FCCU), which has a 50,000-BBL/d capacity; see project report
• $10 million gasoline hydrotreater unit, which has a 60,000-BBL/d capacity and will be adjusted to conform to the "Tier 3" low-sulfur gasoline program; see project report
• $5 million SF alkylation unit, which has a 7,000-BBL/d capacity; see project report

ArcLight Capital Holdings LLC's (Boston, Massachusetts) $1.4 billion restart of the St. Croix Refinery in Christiansted, Virgin Islands, kicked off last quarter and currently is expected to wrap up late this year. The former Hovensa Refinery was shut down and converted into an oil-storage terminal in early 2012, but is now poised to reopen as the Limetree Bay Refinery and will produce about 200,000 BBL/d of low-sulfur fuels, diesel and gasoline.

The St. Croix Refinery got a big boost in November when BP plc (NYSE:BP) (London, England) entered a tolling agreement with the owners to supply the facility with crude and sell its products, according to Reuters. For more information, see Industrial Info's project report.

Later this spring, Suncor Energy Incorporated's (NYSE:SU) (Calgary, Alberta) is expected to begin construction on its $50 million hydrotreater revamp at the Denver Refinery in Commerce City, Colorado, which will modify the facilty's 12,000-BBL/d light straight run hydrotreater to meet Tier 3 standards. The environmental effort likely will be welcomed by those in the Denver area: Last year, the refinery came under scrutiny when state records revealed it had been emitting 8.5 million tons per year of invisible hydrogen cyanide gas, mostly over low-income neighborhoods in northern Denver, according to The Denver Post. For more information, see Industrial Info's project report.

Globally, Industrial Info is tracking $4.3 billion in active refining-related projects involving Jacobs, including $1.18 billion worth in the United Arab Emirates.

Last quarter, Jacobs agreed to sell its energy, chemicals and resources business to Australian EPC firm WorleyParsons (North Sydney, Australia) for $3.3 billion. According to Reuters, the deal will double the size of WorleyParsons and allow Jacobs to focus on "higher growth, higher margin" markets such as aerospace and infrastructure. Industrial Info is tracking more than $123 billion in active, global projects involving WorleyParsons.

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