Refining & Marketing consists of Ergon’s refinery operations and the marketing of various refined products, including naphthenic and paraffinic base and process oils, brightstock, electrical insulating oils, ultra-low sulfur diesel fuel, naphtha, asphalt and other products manufactured in the crude oil refining process.

Refining & Marketing

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. Ergon has a distinct competitive edge as it leverages the capacities, knowledge and relationships of two independent, collaborative refineries. Both utilize other subsidiaries to maximize throughput, provide the lowest cost, improve efficiency and control quality.

Ergon Refining, Inc.
In 1978, Ergon formed Ergon Refining, Inc., (ERI) and built its first refinery to produce fuels at Vicksburg, Mississippi. A vacuum distillation tower was added in 1981 to produce high-quality asphalt; and in 1988, the facility began manufacturing high-quality naphthenic process oils with the use of its first hydroprocessing unit. Today, with the addition of a second hydrotreater and ROSE propane de-asphalting unit, the Vicksburg refinery has grown to be among the largest manufacturers of naphthenic process oil in the world. It 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.

With special technology developed exclusively by ERI, the Vicksburg hydroprocessing plant allows safe, efficient and clean processing of highly acidic, high-sulfur crude oils. 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.

ERI currently processes wax-free naphthenic heavy crude oils from various fields in the North Sea 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 crudes from around the globe. For cost and efficiency purposes, ERI’s sister company, Ergon Oil Purchasing, Inc., handles the initial crude purchases and logistics.

Crude oil is shipped in 80,000-ton tankers to the Ergon-St. James, Inc., terminal located in Louisiana near St. James. The facility, located 162 miles upstream of the mouth of the Mississippi River, holds the crude in storage tanks before it is shipped up to Vicksburg in barges owned and operated by Magnolia Marine Transport Company.

Once production is completed, process 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. Due to heating requirements, asphalt and related products are typically stored in insulated and heated tanks at the refinery and then shipped via insulated trailers to the customer or in heated barges directly to a terminal near the final market. Naphthenic base and process oils produced at Vicksburg are used by Ergon’s global customers in electrical transformer oils, compound blending operations, rubber products, chemical processing, printing inks, metalworking fluids, refrigeration 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 is also expanding its global distribution network in South America, Asia and Australia.

ERI produces multiple grades of liquid asphalts 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. Polymer-modified asphalt is a high-end, more expensive asphalt product that increases the longevity of the paving where it is applied. This type of asphalt is used on expressways, urban roads, intersections, airport tarmacs and other high-traffic areas. Ergon markets its paving asphalt products through Ergon Asphalt & Emulsions, Inc., and Crafco, Inc.

Ergon - West Virginia, Inc.
Recognizing an opportunity to expand its niche markets with high-value, paraffinic products, Ergon’s subsidiary, Ergon - West Virginia, Inc., (EWV) 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% Appalachian grade paraffinic crude oils, particularly Pennsylvania grade gathered from approximately 40,000 facilities 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 handled 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.

After the refining process, the ultra-low sulfur fuel products are sold at the refinery rack or by barge within EWV’s regional market. The process and base oils refined by EWV 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, Inc., provides crude oil acquisition and logistics, as well as division order processing and payments for other Ergon subsidiaries. It also handles crude trading and sales activities with external customers.

Ergon Ethanol, Inc.
Ergon has evaluated alternative fuel development options for several years, including renewable energy sources such as ethanol. In 2006, Ergon Ethanol, Inc., joined forces with a major grain company forming Bunge-Ergon Vicksburg, LLC., to construct and operate a 54 million gallon-per-year ethanol plant in Vicksburg, Mississippi. Completed in mid 2008 with river, rail and truck access, the plant is a consistent supplier of ethanol to the local fuels market as well as customers along the Mississippi River.