Engineering News

Motiva Affirms It Will Continue Port Arthur Project
March 18, 2009

The Motiva Enterprises refinery expansion in Port Arthur valued at more than $7 billion will take at least a year longer to finish because poor market conditions slowed it down, a refinery spokeswoman said Tuesday.

Instead of becoming the nation's largest refinery in 2010, Motiva will have to wait until at least 2012.

Verna Rutherford, Port Arthur refinery spokeswoman, said Motiva recently completed a cost review of the expansion that would make it the largest in the nation with a daily capacity of 600,000 barrels of crude oil.

The delay will affect the thousands of workers on the project as well as the companies that employ them, but the extent isn't yet known, Rutherford said.

In mid-January, almost 90 contractors building the project were laid off.

At the time, there still were about 2,500 workers on the project, Rutherford told The Enterprise then.

Tuesday, she said she didn't know how many contractors were at work.

She also said she did not know whether or how many of that workforce would be cut as well.

"We don't get involved in the daily operations," she said, of general contractor Bechtel-Jacobs, which employs the subcontractors that provide the labor for the project.

Original completion was predicted for 2010, but now is scheduled for the first quarter of 2012, Rutherford said.

"Today's (Tuesday's) announcement provides reassurance we are continuing to move forward," she said. "There was apprehension and concern whether we'd be able to continue the project."

Motiva is a joint venture between Shell Oil and Saudi Refining Inc.

Motiva broke ground on the Port Arthur expansion in December 2007.

Port Arthur refinery general manager Todd Monette also emphasized the project will continue, though he acknowledged current difficulties.

"The financial crisis in our country has created a lot of unrest and questions for many regarding the growth our country has seen over the past several years," Monette said in an e-mailed statement sent by Rutherford.

"In this light, Motiva recently completed its own due diligence on our expansion project and have reaffirmed our plans, with some adjustments in timing, to invest in the energy sector of our country with this statement of continued support for the expansion project here in Port Arthur," his e-mail reads.

"From the initial onset of the project, Motiva has not wavered in its position of investing in energy capacity for the country and I expect the project and the community will end up on an even stronger platform for sustainability in the long run," Monette's e-mail reads.

The extended timeline means slower work and fewer workers on site, Motiva spokesman Stan Mays said told the Houston Chronicle.

Mark Williams, downstream director for Shell, told analysts that the company has cut wages in the Port Arthur project by eliminating overtime.

The delay comes after the company said in January it would perform a cost review of the project, and the update came after Royal Dutch Shell, the European parent of Houston-based Shell, outlined to investors its plans for the future.

Valero Energy Corp.'s Port Arthur refinery also has delayed some of its expansion plans.

Total Petrochemicals Inc. recently unveiled the centerpiece of its $2.2 billion expansion project which will help it remove sulfur from crude.

That project should finish in 2011.

Source: The Beaumont Enterprise, Texas

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