An official with Exxon told Reuters that the global oil giant has plans to expand its Beaumont refinery as well as boost refining capacity at other US Gulf Coast plants. The Examiner photo.
Exxon plans to add crude distillation unit at its Beaumont refinery
Reuters reports a top official with Exxon Mobil Corp. confirmed the global oil giant is considering a multi-billion dollar plan to double US light crude oil refining.
The proposal, which has not received final approval, would be the first major expansion of gasoline and motor fuels production in the US in six years and, when complete, could make Exxon’s Beaumont refinery the largest by capacity in the country.
According to the report, the work on the Beaumont refinery would be finished in the coming decade. Processing at the plant could rise from 362,000 barrels per day (b/d) to 850,000 b/d.
Jack Williams, Senior Vice President said during a presentation to Wall Street analysts last week that the plan includes adding a crude distillation unit (CDU) to its Beaumont refinery. As well, Exxon is looking to boost refining capacity at plants in Baytown, Texas and Baton Rouge, Louisiana.
“It’s really a full Gulf Coast upgrade,” Williams said, according to a transcript of the meeting. As production at US shale fields increased in recent years, Exxon began to seriously consider expanding its refining facilities.
“We know this is going to be a long-term resource,” said Williams.
According to Williams, the project would increase integration of Exxon’s Gulf Coast operations. Products made at the Beaumont refinery would supply its Baton Rouge and Baytown refineries which would cut down on third-party purchases.
Williams calls the plan “perhaps my favorite example on integration” as it combines production and refining across business groups.
In February, Reuters sources said the company was close to a final decision on the project. In the coming eight years, Exxon says it plans to invest $9 billion in six refinery projects globally. It expects returns from its downstream to increase by 20 per cent on average.
An analyst with Energy consultancy IHS Markit says the expansion would be able to take advantage of rising shale oil production from the Permian Basin, which is expected to outpace US refining capacity in the coming years.
“There will still be a sizable surplus of lightweight crude,” Rob Smith, director of IHS Markit’s oil markets and downstream group told Reuters.
US crude production is expected to grown by 4 million b/d by 2023.