Oil Refineries Ltd. of Israel to Get Natural Gas in ‘Few Weeks’

Oil Refineries Ltd. (ORL), Israel’s largest refiner, expects to receive supplies of natural gas to be used as fuel at its refinery in Haifa in the “next few weeks” when regulatory checks on a pipeline are completed.

“We expect the natural gas to be introduced in the next few weeks,” Chief Executive Officer Yashar Ben-Mordechai said today on a conference call. “The pipeline is complete. It’s going through a procedure of checks by the government.”

The company’s plan to cut fuel oil consumption at the site in favor of natural gas is aimed at cutting carbon emissions blamed for global warming. The refiner expected to make the switch by the end of 2010, it said in August.

Once the company starts burning the gas in furnaces, it will be “fully compliant with the environmental regulations,” Ben-Mordechai said. Burning low sulfur fuel oil in furnaces instead of natural gas is more polluting and expensive.

The Haifa refinery has the capacity to process 197,000 barrels of crude a day, according to data compiled by Bloomberg. The CEO expects a utilization rate of 95 percent in 2011.

A new hydrocracker being built on site is “on schedule and on budget,” Ben-Mordechai said. Two reactors arrived from Italy this month and have been installed, he said. The 25,000 barrel- a-day unit, being built at a cost of $500 million, is expected to start operations in mid-2012, the company said in a statement earlier today. Hydrocrackers are mainly used to produce diesel.

Ben-Mordechai will retire after a successor is found, according to a separate statement.


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