How Asset Recovery Helped Reduce Demolition Costs at an Active Refinery
When an industrial process unit is shut down, demolition isn't the only decision to make. Determining what equipment can be recovered before dismantlement begins can have just as much influence on the overall cost of the project.
That was the challenge Marathon Oil faced after electing to cease operations of its lube oil plant at the Catlettsburg Refinery in Kentucky. Although the lube oil plant was no longer needed, the refinery itself remained fully operational. Marathon needed the obsolete process units removed without disrupting refinery operations while recovering as much value as possible from the equipment and materials that remained.
Phoenix combined equipment recovery, scrap management, and industrial dismantlement under a single contract. Integrating these services helped reduce the overall cost of removing the plant while maximizing the value recovered from surplus assets.
Project Overview
The project included dismantling an 18,000-barrel-per-day furfural unit, an 11,000-barrel-per-day methyl ethyl ketone (MEK) extraction unit, and the associated process equipment, utilities, and supporting infrastructure that made up the former lube oil plant.
Because the work was performed inside an active refinery, planning extended well beyond demolition activities. Asset recovery, utility systems, demolition sequencing, material handling, and ongoing refinery operations all had to be carefully coordinated to complete the work safely without interrupting adjacent site activities.
Why Phoenix Was Selected
Marathon was looking for more than a demolition contractor. Recovering value from surplus process equipment and recyclable materials was an important part of the project's economics.
Phoenix contracted to purchase the machinery, process equipment, and scrap while also performing the complete dismantlement of the plant. Combining these responsibilities under a single contract allowed equipment recovery, scrap management, and dismantlement activities to be planned and executed as one integrated project.
Recovering Value Before Demolition
One of the most significant opportunities involved the plant's MEK dewaxing equipment.
Rather than dismantling individual assets for scrap, Phoenix executed a bulk sale of major process equipment associated with the MEK extraction unit, including rotary vacuum filters and vacuum pumps. Recovering an integrated process package before demolition began helped reduce Marathon's demolition budget while preserving valuable equipment for continued industrial service.
That effort required considerably more than simply removing equipment. Phoenix match-marked major components, dismantled and prepared equipment for transport, loaded it for shipment, and relocated assets retained for future resale. Completing this work before dismantlement progressed preserved equipment that otherwise would have entered the scrap stream.
Maximizing Scrap Recovery
After reusable equipment had been removed, dismantlement of the remaining plant and supporting infrastructure proceeded.
Phoenix recovered approximately 5,000 tons of heavy melting steel (HMS) and approximately 400,000 pounds of non-ferrous metals during the project.
Because scrap recovery represented an important part of the project's economics, Phoenix shared proceeds from carbon steel recovery above an established price threshold and documented every shipment through bi-monthly reporting. Jointly verified weight slips and copies of payments received from carbon steel sales provided Marathon with clear visibility into the value recovered throughout the project.
Completing the Project
An agreement for the project was reached in July 2009, and Phoenix mobilized to the site the following month. Dismantlement work began in late August 2009 and continued through September 2010, including the complete removal of concrete slabs.
By combining asset recovery, scrap management, and industrial dismantlement under a single contract, Phoenix helped reduce Marathon's overall project costs while maximizing the value recovered from surplus process equipment and recyclable materials.
This project illustrates how integrating asset recovery into industrial dismantlement can improve project economics while safely removing obsolete process facilities within an active refinery.