Refining & Marketing
Refining & Marketing operations make up Ergon's largest business segment, encompassing the purchase and conversion of crude oil from a wide variety of qualified sources into specialty petroleum products. These refined products are then marketed and distributed worldwide. The Refining & Marketing companies benefit from strategically positioned storage terminals owned and operated by other Ergon subsidiaries and third parties, which facilitate the ability to quickly transport crude and finished products. Ergon leverages the capacities, knowledge and relationships of two independent, collaborative refineries. Both facilities utilize other subsidiaries to maximize throughput, improve efficiency and control quality.
Ergon Refining, Inc. (ERI)
Products: naphthenic process and base oils, brightstock, electrical insulating oils, ultra-low sulfur diesel fuel, naphtha, asphalt
In 1978, Ergon formed Ergon Refining and built its first refinery to produce fuels in Vicksburg, Mississippi. The refinery has grown to be the largest manufacturer 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 industries due to its ability to easily obtain and refine 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.
ERI's Vicksburg refinery is the largest manufacturer of specialty naphthenic products in the world.
Crude oil is shipped to the Ergon-St. James, Inc., terminal located on the Mississippi River in Louisiana. 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 aromatic compounds, naphthenic acids, nitrogen compounds and organic 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 utilizes equipment constructed of sophisticated corrosion-resistant metallurgy to process this type of crude oil, and it continues to evaluate naphthenic crude oil sources worldwide.
Ergon's specialty oils are distributed throughout the globe.
The refinery is equipped with two hydrotreaters, atmospheric and vacuum distillation towers, three hydrogen gas plants, a sulfur recovery unit and a propane deasphalting 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 in 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.
Ergon International, Inc., an ERI subsidiary, distributes specialty naphthenic insulating oils, base oils and process oils to customers in Eastern Europe, Turkey, South Africa and the United Arab Emirates. It maintains a strategically located storage terminal in Belgium, and its licensed distributors are located in Eastern Europe, South Africa and the United Arab Emirates. ERI has also expanded its global distribution network to include South America and Mexico.
Ergon México, S. de R.L. de C.V., provides Mexico with a direct supply of specialty naphthenic and paraffinic products produced at Ergon-owned refineries in Vicksburg, Mississippi, and Newell, West Virginia.
ERI produces multiple grades of residual products in 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. (EWV)
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 to include paraffinic products, Ergon's subsidiary Ergon - West Virginia acquired the Newell, West Virginia, refinery from Quaker State in July 1997. Originally constructed in 1972, the Newell refinery utilizes very high-pressure hydrotreating, solvent dewaxing, vacuum distillation and residuum solvent deasphalting to produce highly refined paraffinic Group II â€œneutralâ€ base oil products, waxes, and Group I bright stock and petroleum resins.
EWV currently has the capacity to process up to 23,500 barrels of crude oil per day. 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. 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.
Ergon - West Virginia produces highly refined paraffinic specialty products and fuels from local Appalachian grade crude.
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 motor oils, gear oils, greases, pharmaceutical and agricultural spray oils and in high-temperature rubber applications.
The location of the West Virginia refinery is a competitive advantage from a transportation and terminaling standpoint as it is the sole refinery in the northeastern U.S. with significant Group II base oil production. Group II standards were set by the automotive industry to provide better fuel efficiency and reduced emissions.
EWV is ISO 9001:2008 certified.
Process Oils, Inc. (POI)
Based in Sugarland, Texas, Process Oils is a specialty oils marketer serving the rubber, plastic and lubricant industries. Founded in 1979, POI has established relationships with a variety of specialty oil manufacturers. POI promotes an extensive portfolio of paraffinic, naphthenic and aromatic oils, but also has aromatic alternatives for the rubber industry that meet European regulations on high PAH oils. POI serves a primary customer base within the United States and Canada, but is steadily growing towards a worldwide market.
Ergon Oil Purchasing, Inc. (EOP)
Ergon Oil Purchasing's roots and core functions stretch back to the earliest days of the Ergon enterprise. EOP purchases crude oil for use at Ergon's refineries and for sale to customers in addition to providing crude oil logistics, division order processing and payments for other Ergon subsidiaries.
EOP has expanded its crude oil gathering and trading activities in several producing areas across the country. Working in conjunction with its sister companies, new infrastructure and facilities have increased overall storage and throughput capacity. Ergon's midstream companies have improved their logistics capabilities, increasing their ability to gather and transport liquids throughout the United States.
Ergon BioSciences, Inc.
Ergon BioSciences is invested in renewable fuels production. Its subsidiary, Ergon BioFuels LLC, is an ethanol processor with nearly 60-million gallons of annual production capacity at its facility in Vicksburg, Mississippi.