* Upgrade completion on target for second half 2013 -CEO
* Commissioning process to take 6 to 9 months
* Project to substantially boost heavy crude processing (Adds analyst comment)
HOUSTON, Feb 5 (Reuters) - BP Plc is not likely tosee the full financial benefits of the $4 billion upgrade at itsIndiana refinery until 2014, Chief Executive Bob Dudley toldanalysts on Tuesday.
He said the project, which will substantially increase the405,000 barrel-per-day (bpd) Whiting plant's ability to processcheap Canadian heavy crude, remains on target to wrap up in thesecond half of 2013. The restart and commissioning process willtake six to nine months after that, he said during BP'sfourth-quarter earnings conference call.
The plant's largest crude distillation unit shut in Novemberas part of the upgrade project and remains on schedule to be out"until the middle of the year," Dudley said.
In December, BP pushed back the startup of that revamped260,000 bpd heavy crude unit by up to 45 days until mid-April,according to energy intelligence group IIR Energy. Specialtynewswire Energy News Today said the restart had been pushed toMay.
Both said that would push back commissioning of a new cokerunit that is key to the refinery's increased ability to runheavy crude.
BP, then and on Tuesday, maintained that the project wouldbe finished in the second half of this year.
Canadian heavy oil producers, hit hard in recent months byunusually deep discounts for their crude compared with the WestTexas Intermediate and Brent benchmarks, have been anxiouslyawaiting the startup of the new equipment at the refinery andits promise of a big increase in demand.
Martin King, analyst with Calgary-based FirstEnergy CapitalCorp, said the unexpectedly long phase-in of the upgrade wouldfurther complicate matters for Canadian producers alreadydealing with those discounts.
Initially, the new equipment had been expected to be up andrunning in the first quarter of 2013.
"Now it sounds like they're going to slowly stage it in intothe third, and maybe into the fourth, quarter. So that's alittle bit of Canadian heavy oil demand we thought was going tobe there at one point, and it looks like it's going to bedelayed again," King said.
The Whiting refinery, the largest in the U.S. Midwest, isthe centerpiece of BP's strategy to focus on its three U.S.Northern Tier refineries that can tap cheap inland U.S. crudeand even cheaper Canadian crude.
Marathon Petroleum Corp closed last week on itsacquisition of BP's 400,780 bpd refinery in Texas City, Texas -the site of a 2005 explosion that killed 15 people - and otherassets for $2.4 billion. Tesoro Corp is awaitingregulatory review of its $2.5 billion plan to buy BP's 266,000bpd Los Angeles-area refinery and associated assets.
The Whiting upgrade will allow the refinery to run up to350,000 bpd of heavy Canadian crude, up from about 80,000 bpd.The plant's overall capacity will remain the same. (Reporting By Kristen Hays in Houston and Jeffrey Jones inCalgary; Editing by Gerald E. McCormick, Jim Marshall, NickZieminski and Tim Dobbyn)
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