By George Gill
 
SHREVEPORT, La. – Calumet Specialty Products' expansion at its refinery here started up May 1, with feedstock beginning to go in early last week, said Kevin Farley, director of business planning.
 
The expansion will increase the plant’s base oil capacity from 3,500 barrels per day of API Group I to 4,800 b/d, and Group II capacity from 3,500 b/d to 7,000 b/d. In addition to moving the Shreveport refinery from mainly Group I to Group II quality base oils, the expansion also provides enhanced feedstock flexibility, Farley told Lube Report.
 
“Depending on what happens with wax prices, lube prices or resid prices, we can swing different types of crude in there, and still make the same quality and mix of products,” he said, “whereas before, we were pretty well locked into one slate.”
 
The additional production will go almost entirely to Calumet’s existing customer base and for internal use. “We don’t have to go out and find a whole bunch of new customers for it,” Farley said.
 
The project has enhanced the refinery’s ability to process sour crude oil. “As of early May, we are processing approximately 16,000 b/d of sour crude oil at the Shreveport refinery, and will continue to increase these rates up to operational limits,” Calumet said in its earnings statement last week. “In certain operating scenarios where overall throughput is reduced, we expect we will be able to increase sour crude oil throughput rates up to approximately 25,000 b/d.”
 
Indianapolis-based Calumet Specialty Products Partners, which owns a naphthenics refinery in Princeton, La., as well as the Shreveport plant, posted a net loss of $3.4 million for the quarter ending March 31, compared to a $28.2 million profit for the year-earlier period. Sales revenue for the quarter was up 69 percent to $594.7 million, versus $351.1 million in 2007’s first quarter.
 
Calumet CEO and President Bill Grube said historically high crude oil prices had posed significant challenges for the company during its last two quarters.
 
“We have implemented multiple rounds of specialty product price increases to customers during this volatile period, and would expect to continue to do so as conditions warrant,” Grube said. “We expect the recent announcements by other major suppliers to reduce or cease production of certain specialty products, especially paraffinic lubricating oils and waxes, should have a favorable impact on Calumet’s success in placing additional specialty products volumes in the market from our Shreveport refinery expansion project.”
 
Specialty products sales volume for the first quarter was 32,088 barrels per day, up 39 percent from the year-earlier period. This included 13,120 b/d of lubricating oils in the quarter, up 30 percent from 2007’s first quarter.