Sinclair Oil Corp. plans to invest $1 billion in its Tulsa refinery to expand fuel production for the Mid-Continent market, city and company officials said Thursday.

The investment -- billed as one of the largest single private investments in the city's history -- will nearly double Sinclair's work force while increasing the refinery's production capacity by about 60 percent.

"This $1 billion investment tells the world that Tulsa is here to do business," Mayor Kathy Taylor told reporters during a press conference announcing the expansion.

The refinery employs about 260 people and could add another 200 by 2010, when the project is scheduled to be completed, officials said.

Sinclair will add additional units to turn low-grade sour crude from the oil sands of western Canada into diesel fuel and gasoline without expanding the refinery's footprint.

The Salt Lake City-based refiner will also add equipment that will reduce emissions by 1,000 tons per day.

Capacity at the refinery is anticipated to grow from 70,000 barrels of fuel per day to 115,000 barrels.

"We are going to provide the market with more gasoline and diesel," said Kevin W. Brown, executive vice president of Sinclair. "That's important for our country."

A new refinery has not been built in the United States since 1976. But the industry has engaged in expansion, building out existing facilities to meet a growing demand for fuel.

For the last two years, U.S. refining capacity has increased by 300,000 barrels, according to the American Petroleum Institute. The industry has added the equivalent of a new refinery every year for the past decade.

John Pilkington, chairman of the Oklahoma Independent Petroleum Association and president of Tulsa-based Muirfield Resources Co., said expanding refineries reduces dependence on foreign oil.

"Anything we can do to increase refined product is a plus for us," he said.

According to the API, the U.S. has imported an average of 1.42 million barrels of gasoline a day for the last five weeks, an increase of nearly 7 percent over the same period a year ago.

Sinclair said it considered the Tulsa refinery's proximity to pipelines and oil storage facilities -- and the city's infrastructure and local utility services -- before committing to the expansion.

"We are reinvesting the profits we've seen over the last several years," Brown said.

The company will also require additional pipeline capacity between the Tulsa refinery and the Cushing Interchange -- an oil hub about 50 miles to the west.

Magellan Midstream Partners LP said Thursday that it will be able to supply additional crude by the end of the year.

"We have taken existing infrastructure and modified it to take 30,000 barrels per day of crude from Cushing to the Sinclair refinery," said Bruce Heine, a spokesman for Tulsa-based Magellan.

The pipeline company has added additional connections to its pipeline to accommodate Sinclair's needs.

Sinclair Tulsa Refining Co., a wholly owned subsidiary of Sinclair Oil, will file an application Friday with the Oklahoma Department of Environmental Quality for an air quality construction permit -- required to expand the plant.

Michael Neal, president and CEO of the Tulsa Metro Chamber, said the three-year expansion project is will require 4 million man-hours during the construction period and add $45 million to the Tulsa economy.

Sinclair said the company would prefer to hire construction workers locally.

"It's huge to think of a billion-dollar investment," Neal said. "It will have a huge economic development impact."

REFINERY PROJECT:

--2005: Sinclair Tulsa Refining Co. begins planning, feasibility studies and engineering for the expansion.

--2007: Sinclair files an application to expand the Tulsa refinery.

--2008: Construction is expected to begin following approval by the Oklahoma Department of Environmental Quality.

--2010: Refinery expansion is scheduled for completion.

Copyright (c) 2007, Tulsa World, Okla. Distributed by McClatchy-Tribune Information Services.

Related Project
Tulsa Refinery
Facility Type: Refinery Owner: Sinclair Oil Corp.
Scope: Expansion Location: Tulsa, OK United States