Exxon Nears Final Approval of Major Expansion at Beaumont Refinery

Reuters, February 23, 2018

ExxonMobil Corp is nearing final approval of a major expansion to its Beaumont, Texas, refinery that could make it the largest crude processing plant in the United States, according to three sources familiar with the company’s deliberations. An expansion has been under consideration since at least 2014. A go-ahead would signal Exxon’s confidence in U.S. shale production and in global demand for gasoline and other fuels.

Exxon continues to evaluate increasing its North American light crude refining, but has not made any decisions, spokeswoman Sarah Nordin said on Wednesday. “The Beaumont refinery is being considered as part of that evaluation,” she said. Chief Executive Darren Woods last month said that Exxon was considering investing $50 billion in the United States over the next five years.

The company has been weighing putting in a third crude distillation unit (CDU) at the 362,300 barrel-per-day refinery. To top Motiva Enterprises’ Port Arthur, Texas, plant, now the largest, Exxon would have to add the capacity to process another 300,000 bpd and 400,000 bpd. CDUs do the primary refining of crude oil and provide the feedstock for units that produce gasoline, diesel and other products. Motiva’s Port Arthur refinery can process as much as 635,000 bpd of crude oil, according to the U.S. Energy Information Administration.

One of the sources, who declined to be identified because he was not authorized to speak publicly about the deliberations, said the company was still calculating the size of the new CDU. “They’re still crunching the numbers,” the source said. Exxon has considered the total capacity for an expanded Beaumont refinery at between 700,000 and 850,000 bpd. In 2016, Exxon added 20,000 bpd in light crude refining capacity at Beaumont.

A new expansion will take advantage of the growth in U.S. shale production, which is expected to about double the nation’s oil output to more than 11 million bpd later this year, from 5.6 million bpd in 2011, according to the EIA. Nordin said any expansion would take place between 2019 and 2022 within the 2,000-acre Beaumont site where the refinery and an adjoining chemical plant are located to “minimize environmental impact.” The project, if approved, would create up to 1,850 construction jobs and between 40 and 60 permanent jobs upon completion, Nordin said.

The expanded unit would enhance the Beaumont refinery’s competitive position and establish it as a leader in the North American refining industry,” she said.

(Reporting by Erwin Seba; Editing by Tom Brown)

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