Thursday, February 2, 2023

Exxon Preparing to Open Its Massive $2B Refinery Expansion in Beaumont 

Exxon Mobil said Monday it finished building its $2 billion refinery expansion in Beaumont and plans to start it by the end of March, bringing the equivalent of a mid-size refinery to the market at a time when refining capacity has been tight.

Start-up procedures have begun at the crude processing unit, which will increase Exxon’s refining capacity along the Gulf Coast by about 17 percent and bring the Beaumont site’s refining capacity to more than 600,000 barrels per day — rivaling the nation’s largest refinery, Motiva’s Port Arthur refinery, which can process 630,000 barrels per day.

The expansion offers relief after a year of at-times desperately tight refining capacity that drove fuel prices to record highs and prompted the Biden administration to consider emergency measures. The capacity to process oil into fuel grew tight after aging and damaged refineries closed permanently during the pandemic, shrinking capacity by 1 million barrels per day in the United States and 3 million barrels globally since January 2020.

The new unit will add 50 jobs to the site and can process light crude from the Permian Basin. Exxon began constructing it in 2019, saying at the time the company aimed to capitalize on production growth in West Texas and establish the Beaumont refinery “as a leader in the U.S. refining industry.”

The project equips the Beaumont refinery to prioritize its diesel production, which has been especially tight, said Debnil Chowdhury, S&P Global Commodity Insights’ head of fuel and refining in the Americas.

“Beaumont is starting at an opportune time as the Russian crude and product sanctions will create prospects for U.S. refiners to fill the void,” he said. “Also gasoline, diesel and jet fuel demand continue to come back from the pandemic to provide an outlet for the products from Beaumont.”

While other refineries shuttered in the face of mounting costs and as the pandemic suppressed demand, Exxon said it kept developing the project.

“We maintained investments in the refinery expansion even through the lows of the pandemic,” it said in a statement.

The 250,000 barrel-per-day expansion in Beaumont nearly replaces the refining capacity expected to fall from the local market this year when LyondellBasell closes its aging Houston refinery, which can process 268,000 barrels of oil per day.

No comments:

Post a Comment