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Motiva Moving Ahead on 325,000 Barrel-per-Day Refinery Expansion in US

Motiva Enterprises LLC—a joint venture between Shell and Saudi Refining Inc.—announced that it has made significant progress toward expanding refining capacity in the United States. The company has completed initial project scoping and process design for a potential 325,000-barrel-per-day crude throughput increase at the Motiva Port Arthur Refinery in Texas.

The project would more than double the current 275,000 barrel-per-day capacity of the Port Arthur Refinery—originally built in 1903 as Texaco’s first refinery—to make it the largest in the US.

Pending regulatory approvals, Motiva would expect to initiate final engineering later in 2006 and begin construction in 2007. The new capacity would be projected to come online in 2010.

We are confident that the market fundamentals will support an expansion of our US refining capacity. Adding 325,000 barrels-per-day of refining capacity would be the equivalent of building a new refinery in the United States.

—William B. Welte, Motiva President and CEO

The Shell-Saudi partnership runs two other Gulf Coast refineries, both in Louisiana: the Convent Refinery with a capacity of 225,000 barrels of crude oil daily and the Norco Refinery with a capacity of 240,000 barrels per day.

Comments

Rafael Seidl

This additional capacity is not due to go online until 2010, assuming the go-ahead to build is given. The Texas coast is just as vulnerable to hurricanes as Louisiana.

Current US gasoline demand is around 9 million barrels per day, probably 10-11 by 2010. The proposed increase will not nearly suffice. Other refineries must also expand capacity or - preferably - new alternative fuel infrastructure must pick up the slack. This could happen only if big oil had an incentive (e.g. by way of SEC reporting criteria for proven reserves) to invest its current windfall profits in alternatives *and* NIMBY recourse to the courts would be curtailed by declaring a national energy security emergency.

An actual drop in consumer demand for gasoline by 2010 is highly unlikely unless prices rise much further. This would be true even if supply and demand for more fuel-efficient vehicles were to go through the roof, as it takes about a decade for the entire deployed fleet to churn.

Lucas


In the meanwhile, if a Global-Warming Hurricane wipes out Houston we will all be walking the hundred miles to work each day.

Wonder if we can get Mexico to loan us some of their rapid transit buses.

Joe Rocker

That is a waste of money. Why not give the construction money to the CEO?

Joe

"Current US gasoline demand is around 9 million barrels per day, probably 10-11 by 2010. "

That means demand will rise between 11-22% over the next four years. Hmmm..

Prices for gasoline four years ago - $1.446 versus $2.960 today - see
http://tonto.eia.doe.gov/dnav/pet/hist/mg_tt_usw.htm

Consumption over past 4 years has risen about 5%... about 400,000 barrels/day. see -
http://tonto.eia.doe.gov/dnav/pet/hist/wgfupus24.htm

Cheap prices and demand rises 5% - Expensive prices and demand rises 11-22%
Doesn't make much sense to me.

However, in the remote possibility that does occur, then I am guessing that imports of gasoline will rise to cover any gap.

hampden wireless

High gas prices are no longer the few week scar they were after Katrina. They are here for most of the summer now. This alone will curb demand. I dont think gas demand will continue to grow at the current rate of about 1.2% a year. Just knowing what my friends have done our gas usage is down. I have reduced my personal gas usage since Katrina. Gas demand will probobly not grow much in the next year. By the time the refinery is built it will probobly be needed but we wont be strapped for refinery capacity. Now the crude input could be quite restricted by then.

Mark R. W. Jr

"In the meanwhile, if a Global-Warming Hurricane wipes out Houston we will all be walking the hundred miles to work each day."

You ain't gonna be happy until the president takes the fall for Katrina, eh?

John Ard

Why don't we just allow people to have a private ethanol reactor (newspeak for a still) and produce their own fuel? :) I know several older people who did that during the 1970's so they could still drive their Impalas, Novas, and Camaros. They didn't care about mileage because they made the stuff from kitchen scraps. Not the best quality fuel, but it beats smelling food scraps in the garbage can.

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