Engineering News

Marathon Completes Garyville Expansion
Friday January 8, 2010

Marathon Oil Corp. (MRO) completed the expansion of its Garyville, La., refinery and the new units are being integrated, a company spokesman said Friday.

"Completed on schedule during the fourth quarter of 2009, the Garyville Major Expansion (GME) units are currently in the process of being fully integrated with the original Garyville refinery operations," Marathon spokesman Robert Calmus said in an email.

The upgrade will expand the refinery's capacity to 436,000 barrels a day from 256,000 barrels a day, making it the fourth largest refinery in the U.S. It comes at a time when the U.S. refining industry has seen its margins slammed by high crude oil prices and sharply lower demand due to the recession. Refiners have been scaling back operations, processing crude oil at record-low rates for this time of the year at just under 80% of capacity. Last year, Valero Energy Corp. (VLO)shut down its Delaware City, Del., refinery and idled the one in Aruba while Sunoco Inc. (SUN) idled its Eagle Point refinery in Westville, NJ. Analysts estimate that another one million barrels a day needs to be shut down in the U.S. MO< Per company policy, Marathon's Calmus declined to comment about the timeline of the integration or what the planned rate will be at Garyville. However, he noted that the company will begin a previously announced turnaround at the refinery in January, which is expected to be complete within the first quarter.

As part of the Marathon upgrade, the company added a new crude unit that can process 180,000 barrels a day, a coker unit with 44,000 barrels a day and a 70,000-barrel-a-day hydrocracker. Other new units include a CCR Platformer Unit, a kerosene hydrotreater, a naphtha hydrotreater, sulfur units and a saturated gas units. The additional production knocks Citgo Petroleum's nearby refinery in Lake Charles, LA, from the number four spot. Exxon Mobil Corp. (XOM) owns the nation's two largest refineries, the 572,500-barrel-a-day refinery in Baytown, Texas, and the 503,000-barrel-a-day refinery in Baton Rouge, LA, followed by 455,790-barrel-a-day refinery operated by BP PLC (PLC) in Texas City, TX.

Marathon shares were recently down 2 cents at $32.60. The stock posted 14% gains over the past 12 months.

Source: Dow Jones Newswires

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