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04 13, 2012 by Reuters
Motiva Enterprises LLC's Port Arthur refinery is on track to become the largest in the United States by September when its capacity reaches planned rates of 600,000 barrel per day (bpd) with the addition of a 325,000 bpd crude distillation unit, expected to begin start-up by late April.
The start-up is not expected to bring a surge in production along the Gulf Coast as Motiva plans to carry out repairs on other production units as well as take its time starting the new unit to iron out any kinks.
The start-up will coincide with the shutdown of a 58,000 bpd coking unit for a five-week overhaul on the Texas-Louisiana border, which has a current crude oil throughput of 285,000 bpd, the sources said.
After the new crude distillation unit (CDU) completes its initial start-up, expected by mid to late May, Motiva plans to shut a 180,000 bpd vacuum crude distillation unit for an overhaul, expected to last at least four weeks, the sources said.
Motiva was unavailable to comment on refinery plans.
The vacuum unit will not be taken out of production until the new CDU is running smoothly.
"They want to make sure they have the new one running before they shut the old one," one source said.
The start-up of the new CDU has been planned in the second quarter of 2012 for several months, but could be moved if problems develop with the new equipment, the sources said.
The new CDU is expected to reach full capacity in September, according to the sources. At that time, the refinery's total crude oil refining capacity is planned to be 600,000 bpd, creating the largest refinery in the United States.
"They're in the transition from construction to start-up," a source said. "They're checking everything and making sure all the bolts are tight."
Currently, Exxon Mobil Corp (NYSE: XOM - news) 's 560,640 bpd Baytown, Texas, refinery is the nation's largest.
Improvements in operating efficiency of the new crude unit are expected to lift the refinery's maximum crude throughout capacity to about 660,000 bpd by sometime in 2013, sources have said.
Motiva began construction on the expansion of the Port Arthur (Euronext: ART.NX - news) refinery in 2007. The project was originally budgeted at $5 billion, but analysts have said the price tag has reached $7 billion. Motiva has declined to disclose the current cost of the expansion.
The expansion was originally planned to begin operation in 2010, but was delayed in part by a year-long review of costs in 2009 ordered by Motiva partner Saudi Refining to examine spending.
Motiva is a 50-50 joint venture between Royal Dutch Shell Plc and Saudi Refining.
The project was first announced during the 2002-2008 period referred to by U.S. refiners as the "Golden Age," when high global demand for motor fuel drove refining margins to historic highs.
The downturn in demand brought about by the global recession that began in 2008 has led analysts to question the need for the expansion of U.S. refineries.
The decision by Sunoco Inc (NYSE: SUN - news) to halt East Coast refining operations and ConocoPhillips (EUREX: COPF.EX - news) to shut a Pennsylvania refinery along with higher global demand has since improved returns for U.S. refiners.
A CDU refines crude oil coming into a refinery and provides feedstock for all other refinery units.
A coking unit increases the amount of refined material from a barrel of oil and makes petroleum coke, a coal substitute, from residual crude.
A vacuum distillation unit increases the amount of feedstock made from a barrel of crude oil.
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