Valero's Three Rivers Refinery Gets a $100 Million Boost

Valero has been able to increase Eagle Ford crude oil capacity at its Three Rivers Refinery with $100 million in improvements over the past few years. Changes included expanding crude oil storage capacity, adding truck unloading capacity, and increasing light crude processing capabilities. The facility has shifted from importing heavy foreign crude oil to supplying 85% of its needs locally. Approximately 85,000 b/d of the 100,000 b/d running through the plant is produced in the Eagle Ford Shale.

• The plant receives 35,000-40,000 b/d of oil from 350-400 trucks each day
• Supports 300 full-time jobs in Three Rivers
• 80-200 contract jobs at any given time

Read more on the history of the plant and recent improvements at Caller.com

TexStar Pipeline Open Season Begins

TexStar Midstream began on open season for a 110 mile crude pipeline in South Texas on December 12, 2011. The 100,000 b/d pipeline will move crude and condensate from Gardendale to Oakville, near Valero's Three Rivers refinery. The company will then move volumes down to Corpus Christi through a NuStar pipeline. The project could be online as soon as mid-year 2012 and will be the first major pipeline and midstream expansion bringing oil to the coast. 

In Corpus Christi, the oil will be able to be loaded on an ocean-going barge which can carry between 100,000 to 150,000 barrels or small ship carrying 300,000 barrels and sent up along the coast to Houston's refinery row.

The expected terminus will eventually ending up further east along the Gulf Coast at the oil hub of St. James, Louisiana.

Monroe said that TexStar expects to get enough firm commitment for five years of transportation to make the project work as production from the Eagle Ford is expected to rise from about 200,000 bpd now to as much as a million bpd in 2016.

"There is incentive for shippers. We also expect to have walk-up shippers paying a walk-up tariff, which is a fairly common strategy," said Monroe.

Read more at reuters.com

Drought Delaying Projects in Three Rivers, TX

Development projects in Three Rivers, TX, are waiting for water. Water treatment facilities are running at full capacity and some of the Apartment, Hotel, and RV developments are waiting until more water can be sourced. Bring the rain......

...Jayson Patel tells us he is building hotels. The frame is already raised and the roof work has begun on this particular hotel in Three Rivers.

Patel said it is a custom job: built based on what oil outfitters want for their workers.

“It’s a 40 unit hotel," he said. "It’s all suites, got an indoor pool, a meeting room - because a lot of these companies require meeting spaces."

When asked if the hotel is already going to be full by the time it's operational, he replied, “Yes. Yes. Yes.”

The hotel will be open in January, and just in time. the operators said. There’s a housing shortage in the Eagle Ford Shale oil boom area, and the city of Three Rivers has temporarily stopped hooking up new developments to the water system. That’s got some future RV camps, motels and apartment complexes on hold, at least for now...

NuStar - Valero Reach Eagle Ford Pipeline Agreements

NuStar Energy and Valero have reached an agreement that will help move South Texas Eagle Ford crude to local refineries. NuStar will convert a current refined products pipeline to crude oil and the line will be used to move oil from Three Rivers to Corpus Christi where Valero has an additional refinery. The company also plans a new 12 inch pipeline that will make the same journey. Valero has indicated it plans to increase the volume of crude the company is taking from the Eagle Ford and this looks to be another step in that direction. 

NuStar Energy L.P. (NYSE: NS) announced today that the company has entered into an agreement with Valero Energy Corporation (NYSE: VLO) in which NuStar will modify existing sections within its South Texas pipeline system and build new sections to transport Eagle Ford and other crude oils. These projects will help improve transportation of crude and condensate to supply its refineries in Three Rivers, Texas and Corpus Christi, Texas.

NuStar will reverse an eight-inch refined products pipeline that currently runs from Corpus Christi to Three Rivers and will convert it to crude oil service. The pipeline will provide capacity to transport Eagle Ford crude and condensate to Valero’s Corpus Christi refinery, and the line is expected to be in full service by the end of September 2011.

NuStar will also build 55 miles of new 12-inch pipeline that will connect to existing pipeline segments to move crude oil from Corpus Christi to Valero’s Three Rivers refinery. This system is expected to be completed and in service by the second quarter of 2012.”

Read the full press release at nustarenergy.com

Marathon Petroleum and Valero Refineries are Adding Eagle Ford Oil

Marathon Petroleum and Valero Energy refineries are expanding to accept more Eagle Ford Shale crude oil. Both companies have expansion plans that will allow greater volumes of oil to flow through the refineries and the companies want Eagle Ford crude because it is easier to refine than the heavy crudes that are imported from South America. On the back of Marathon Oil's Eagle Ford Shale acreage acquisition, Marathon Petroleum might stand to benefit the most if refining margins hold. 

For Marathon Petroleum, there are some promising developments that could boost future operations in a big way. The company’s Garyville refinery in Louisiana has been performing above expectations. A capacity of 436,000 barrels per day last year to a current output of 464,000 bpd indicates the company’s appetite for expansion. However, a higher capacity doesn’t seem to have whetted its appetite.

In fact, Marathon has already received the approval from state regulators to increase the refinery's overall capacity to 545,000 bpd. This is very promising. Distillate exports from this refinery have gone up in the second quarter to 70,000 bpd from 65,000 bpd earlier.

Additionally, with the advent of shale plays, sweet crude processing should see growth. The company's Texas refinery is, in fact, looking to increase crude oil processing from the Eagle Ford shale play. This region will witness a significant ramp up in production by next year, when most upstream companies will have their wells flowing.

Valero Energy (NYSE: VLO ) has already ramped up its Eagle Ford crude inputs, with its Corpus Christi refinery processing 25,000 bpd. It is also planning to increase its Three Rivers refinery capacity from 40,000 bpd to 60,000 bpd. Valero seems to have a head start here. Marathon, which has plans to increase its sweet crude intake at its Texas City refinery, should stand to benefit.

Read the full news release at fool.com