HOUSTON, Feb 17 (Reuters) - Tesoro Corp has approved two projects at its Washington state refinery to produce a petrochemical feedstock for export and cleaner gasoline, the company said on Tuesday.
The company’s $300 million mixed xylenes project, slated to start up in 2017, will gather reformate, a high-octane gasoline blending stock, from Tesoro’s U.S. West Coast refineries at its 120,000 barrels per day refinery in Anacortes. There, a new unit will extract 15,000 bpd of xylene from the reformate primarily to export to Asian markets.
Xylene is used primarily to make polyester fibers and films for clothing, food packaging and beverage containers, Tesoro said.
C.J. Warner, Tesoro’s executive vice president of strategy and business development, told analysts in December that gasoline supply on the West Coast was ample, while Asian demand for xylenes was growing.
The company can extract xylene from reformate not needed for gasoline and export it at lower cost than U.S. Gulf Coast refineries because of the closer proximity to those markets, she said.
The company also approved a $90 million naphtha isomerization project, slated to start up in 2018, that is intended to comply with reduced-sulfur gasoline regulations and cut gasoline production costs, Tesoro said. Naphtha is a building block for gasoline. (Reporting By Kristen Hays)