Marathon Expanding TX Production

Tuesday, December 8, 2015 @ 12:12 PM gHale

Marathon Petroleum will begin shutting underperforming units next year as it integrates two Texas City, Texas, refineries into the second-largest refinery in North America.

A five-year, $2 billion series of projects will combine the 475,000 b/d Galveston Bay and 80,000 b/d Texas City refineries to a single 585,000 b/d facility, Marathon officials said.

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The company plans next year to begin shutting catalytic cracking unit 1, one of three gasoline blendstock-producing units of its kind at Galveston Bay. Marathon will later shut heaters at its older Texas City refinery as it integrates steam production, and then shut down reformer and aromatics units at the same refinery in 2019.

Marathon will revamp a heavy crude unit, adding 40,000 b/d of capacity and improving gas oil and distillates yields. It will upgrade a resid hydrotreater, adding 20,000 b/d of capacity to bring it to 90,000 b/d. It will also add a new ultra-low sulfur diesel (ULSD) hydrotreater to shift the facility to 100pc ULSD production and increase finished distillates output to 65,000 b/d.

Marathon purchased the refinery and other Gulf coast assets from BP in 2012 for $598mn. BP at the time said it would cost too much to add light, sweet domestic crude processing to the facility. The refinery also struggled to keep all of its gasoline-producing fluid catalytic cracking (FCC) units operating consistently.

Marathon sees the refinery as half of its two-pronged waterborne gasoline strategy in the U.S. Gulf coast. The U.S. independent refiner uses its Texas City assets in conjunction with its 562,000 b/d refinery in Garyville, Louisiana, to supply Gulf coast markets including Florida and growing export demand.

Through logistics projects, Marathon plans to reach 395,000 b/d of gasoline export capacity by the end of 2017 and to push to 500,000 b/d of capacity by the end of 2018.