Chevron Corporation plans to build a pre-commercial plant at its refinery in Pascagoula, Miss., to test the technical and economic viability of a breakthrough heavy-oil upgrading technology. This proprietary technology, called Vacuum Resid Slurry Hydrocracking (VRSH), has the potential to significantly increase yields of gasoline, diesel and jet fuel from heavy and ultra-heavy crude oils and could be used to increase and upgrade production of heavy oil resources.

"This project will advance Chevron's heavy-oil upgrading capability and is an important research and development initiative for the company," said Mike Wirth, executive vice president of Global Downstream for Chevron. "Given the increasing role of heavy oil in meeting the world's growing energy demand and our significant heavy oil resources, this technology could provide a unique pathway to increase supplies of clean-burning fuels for the marketplace."

The Pascagoula pre-commercial plant will have a capacity of 3,500 barrels per day. All necessary permits have been secured, and construction is expected to begin later this year.

Chevron has been actively developing VRSH technology since 2003. The patented process has undergone successful preliminary testing on a wide range of feedstocks in multiple pilot plants at Chevron's research center in Richmond, Calif. Chevron's research shows the technology can achieve up to 100 percent conversion of the heaviest feedstock.

John McDonald, vice president and chief technology officer for Chevron, said, "The development of VRSH technology further strengthens Chevron's capability to convert heavy oil resources into high-value fuels, providing an integrated solution that will benefit both upstream and downstream businesses. VRSH is a milestone in Chevron's commitment to develop new technologies that will expand and diversify energy supplies to help meet the rapid growth in global energy demand."

The Pascagoula Refinery, Chevron's largest wholly owned petroleum refinery, has been operating in Mississippi for over 40 years. "We have the experience and expertise to construct and operate the pre-commercial plant in a safe and environmentally responsible manner and are extremely pleased to play an important role in advancing this promising new technology," said Roland Kell, general manager of the Pascagoula Refinery.

The estimated volume of technically recoverable heavy oil and natural bitumen in known accumulations is about equal to the earth's remaining conventional light oil reserves.