Ergon’s Refining & Marketing operations make up the largest and most capital-intensive business segment, encompassing the conversion of crude oil from a variety of sources into diverse petroleum products. These products are then marketed and distributed on a worldwide scale. Refining & Marketing benefits from strategically positioned storage terminals owned and operated by other Ergon subsidiaries, which facilitate its ability to quickly transport crude and finished products. Ergon has a distinct competitive edge as it leverages the capacities, knowledge and relationships of two independent, collaborative refineries. Both facilities utilize other subsidiaries to maximize throughput, provide the lowest cost, improve efficiency and control quality.
Ergon Refining, Inc.
Products: Naphthenic process and base oils, brightstock, electrical insulating oils, ultra-low sulfur diesel fuel, naphtha, asphalt
In 1978, Ergon formed Ergon Refining, Inc. and built its first refinery to produce fuels at Vicksburg, Mississippi. The refinery has grown to be among the largest manufacturers of naphthenic process oil in the world, and currently has a processing capacity of up to 25,000 barrels of crude oil per day.
Strategically located 340 river miles north of New Orleans in the Vicksburg Industrial Park just off the Mississippi River, ERI benefits from low transportation costs via river, rail and highway. ERI also enjoys distinct competitive advantages in the process and base oil industry due to its ability to easily obtain and refine any type of naphthenic crude into high-quality finished oils for niche markets worldwide. For cost and efficiency purposes, ERI’s sister company, Ergon Oil Purchasing, Inc. handles the initial crude purchases and logistics.
Crude oil is shipped to the Ergon-St. James, Inc. terminal located on the Mississippi River in Louisiana near St. James. The facility stores the crude before it is shipped to Vicksburg in barges owned and operated by Magnolia Marine Transport Company. ERI currently processes naphthenic heavy crude oils from various fields around the globe that contain high quantities of naphthenic acids and sulfur. These crudes are especially corrosive, and there are a limited number of refineries capable of processing them without dilution with more expensive, less acidic crude. ERI has made significant investments in equipment constructed of sophisticated corrosion-resistant metallurgy in order to process this type of crude oil and continues to evaluate other crude oil varieties worldwide.
The refinery boasts two hydrotreaters, atmospheric and vacuum distillation towers and a ROSE propane de-asphalting unit. ERI produces specialty petroleum products using a distributed digital control system, while an ERI developed statistical process control system aids operators in maintaining the highest standards of product consistency, repeatability, quality and stability.
Once production is completed, the specialty oils are stored near the refinery and then sent by barge, truck or rail directly to customers or to bulk storage tanks in terminals around the world. Naphthenic base and process oils produced at Vicksburg are used by Ergon’s global customers in numerous applications, including transformer oils, compound blending operations, rubber products, chemical processing, printing inks, metalworking fluids, refrigeration oils, hydraulic fracturing oils, paints and greases.
ERI subsidiary, Ergon Europe MEA, Inc. was formed to distribute process oils to customers in Europe and the Mediterranean Sea area directly through nearby terminals initially in Belgium and the United Kingdom. ERI has also expanded its global distribution network in South America, Asia and Australia.
ERI produces multiple grades of residual products at Vicksburg, including industrial asphalt flux used in the roofing and bunker fuel markets. Also at the Vicksburg facility, Ergon Asphalt & Emulsions, Inc. produces polymer-modified asphalts, asphalt emulsions and SUPERPAVE® asphalt paving products.
Ergon - West Virginia, Inc.
Products: Highly refined paraffinic process and base oils, waxes, ultra-low sulfur gasoline and diesel fuels, kerosene solvents, petroleum resins
Recognizing an opportunity to expand its niche markets with high-value, paraffinic products, Ergon’s subsidiary, Ergon - West Virginia, Inc. acquired the refinery at Newell, West Virginia, from Quaker State in July 1997. Originally built in 1972, the Newell refinery utilizes high-pressure hydrotreating technology to produce highly refined paraffinic specialty products and fuels from local Appalachian grade crude.
EWV currently has capacity to process over 20,000 barrels per day of crude oil. EWV processes 100% paraffinic crude oils gathered from approximately 40,000 locations throughout Ohio, Pennsylvania, West Virginia, Kentucky and New York.
The crude refined at EWV provides a very high yield of paraffinic specialty products when compared with other types of crude oil processed by paraffinic competitors. It is initially managed by Ergon Oil Purchasing and transferred by truck or pipeline to gathering centers in Ohio and Pennsylvania before moving on to the refinery via truck, barge and pipeline. EWV maintains the flexibility to purchase additional crude from other sources and ship it to the refinery via barge or pipeline.
Crude oil is refined using the facility’s hydrotreater and Methyl Ethyl Ketone (MEK) dewaxing unit. After the refining process, the ultra-low sulfur fuel products are sold at the refinery truck rack or by barge within EWV’s regional market. The paraffinic process and base oils are used in a wide variety of applications, including compounding motor oils, gear oils, greases, pharmaceutical and agricultural spray oils, food grade applications and in high-temperature rubber applications.
Since EWV is the only refinery in the northeastern U.S. with significant Group II base oil production, it enjoys a substantial transportation and terminaling advantage over competitors that must barge products from the Gulf Coast or deliver via long-range rail. Group II standards were set by the automotive industry to provide better fuel efficiency and reduced emissions. Paraffinic-based process oils enable Ergon’s Petroleum Specialties Marketing Division to offer a wide range of specialty products to customers.
Ergon Oil Purchasing, Inc.
Ergon Oil Purchasing provides crude oil acquisition and logistics, division order processing and payments for other Ergon subsidiaries. It also manages crude trading and sales activities with external customers.
EOP has expanded its crude oil gathering and brokerage activities in the Marcellus and Utica producing areas, making it the premier gatherer in the region. Working in conjunction with its sister companies Ergon – West Virginia, Magnolia Marine and Ergon Trucking, Ergon Oil Purchasing has added storage tanks and infrastructure to its terminaling facilities for an increase in overall storage capacity. Ergon’s midstream companies improved their logistics capabilities as part of the expansion, adding assets that have increased their ability to gather and transport liquids throughout the eastern United States.
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