Largest Refineries in the U.S. Benefit From Eagle Ford Crude

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

Chevron Phillips - Baytown Petchem Facility to be World's Largest

Chevron Phillips announced the company is going forward with a major petro-chemical facility at the Cedar Bayou Chemical Complex in Baytown, TX. The new plant will be the world's largest on purpose 1-hexene plant and will be capable of producing 250,000,000 metric tons (551,000,000 lbs) per year. The announcement follows a release less than two weeks ago that the company will expand NGL fractionation, at the Sweeny Plant in Old Ocean, TX, to 116,000 b/d. An increase in capacity of 22,000 b/d or almost 20%.

Both developments are the direct result of growing feedstock supplies from liquids plays that produce significant volumes of NGLs. We discussed the reasoning behind new fractionation and petchem facilities in more detail in a previous article titled Eagle Ford NGLs Adding to U.S. Supply Growth.

1-hexene isn't in my normal vocabulary, but the company provided the following description.

The new 1-hexene unit at the Cedar Bayou facility will enjoy significant advantages in infrastructure, feedstock availability, and operational expertise. 1-hexene is a critical component used in the manufacture of polyethylene, a plastic resin commonly converted into film, pipe, detergent bottles, and food and beverage containers.

Construction on the petchem plant will begin soon, with a targeted completion date of early 2014.  The fractionator expansion will be complete early in 2013.

Read the entire press release at cpchem.com