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Exxon to move forward on major Beaumont refinery expansion

January 29, 2019

Irving, Texas-based Exxon Mobil Corp. (NYSE: XOM), which has a major campus in the Houston area, has approved an expansion at its refinery in Beaumont, Texas, that could make it the largest in the country. 

The company confirmed in a Jan. 29 press release that it has made a final investment decision and started construction on a third crude distillation unit at the refinery. The new unit will increase the refinery's crude processing capacity by 250,000 barrels per day — a 65 percent increase.

The refinery currently processes 366,000 barrels of crude oil per day and produces 2.8 billion gallons of gasoline a year, according to Exxon’s website. The new unit would bring that to around 616,000, likely ranking Exxon's refinery ahead of Houston-based Motiva Enterprises' refinery in Port Arthur, Texas, currently the largest nationwide. Motiva’s refinery has a capacity of 603,000 oil barrels per calendar day, though it reportedly can process up to 635,000 barrels per day. 

The project is expected to create up to 1,850 jobs during construction and between 40 and 60 permanent jobs once the unit is completed, which is expected by 2022, per the release.

“With access to terminals, railways, pipelines and waterways nearby, the Beaumont refinery is strategically positioned to benefit from Permian production growth,” Bryan Milton, president of ExxonMobil Fuels and Lubricants Co., said in the release. “The addition of a third crude unit in Beaumont will enhance the refinery’s competitive position and truly establish it as a leader in the U.S. refining industry.”

Back in October, three sources told Reuters that Exxon had begun groundwork for the expansion even though a final investment decision had not been made. At the time, an Exxon spokeswoman told Reuters that the crude distillation unit was expected to begin construction in 2019 and begin processing by 2022. One of the sources also told Reuters that plans included building the new unit above the level of Hurricane Harvey’s floodwaters. 

In September, Exxon announced that a new unit at the Beaumont facility had started operations. That expansion increased the facility’s production of ultra-low sulfur fuels by about 45,000 barrels per day, according to a September 2018 press release. That investment reportedly cost $450 million. Back in 2016, Exxon boosted the Beaumont refinery’s crude processing capacity by 20,000 barrels per day. 

Elsewhere in Gulf Coast refineries, California-based Chevron Corp. (NYSE: CVX) reportedly has agreed to buy a refinery in Pasadena from Brazil’s state-run oil company, Petróleo Brasileiro SA (NYSE: PBR), commonly known as Petrobras. A Chevron executive previously said the company wanted to add a second Gulf Coast refinery. 

Additionally, Motiva is considering two petrochemical projects at its Motiva Port Arthur Refinery Complex that would cost $6.63 billion combined. Construction would start on both projects in the first half of 2020 if Motiva decides to move forward at the site, with completion estimated for the end of 2022.

By Olivia Pulsinelli, Houston Business Journal