In about a month’s time, Motiva Enterprises’ Port Arthur refinery will become the largest in the U.S., with 600,000 barrels per day of crude refining capacity. The facility will surpass ExxonMobil’s Baytown refinery that has a capacity of approximately 560,000 barrels per day. Both will benefit from growing U.S. crude supplies.
Motiva is a joint venture owned by Shell and Saudi Aramco. The expansion of the Port Arthur refinery was planned over five years ago without the knowledge of growing production in the Eagle Ford Shale and Permian Basin. That’s a bonus that will be welcomed with open arms. Local supply generally leads to better margins for refineries.
While parts of the refining industry have made little to negative returns over the past few years, new facilities like Motiva’s will be the benchmark for the future. The economies of scale and modern technology will give it an even greater advantage over other U.S. refineries that are near the end of their useful lives.
If you’d like to learn more, you can read an entire article on the subject at minyanville.com