By Jeffrey Kerr
NEW YORK, April 26 Royal Dutch Shell Plc
and Saudi Aramco became co-owners of the
largest U.S. refinery on Thursday when a new crude distillation
unit at their joint-venture Motiva Enterprises Port
Arthur, Texas, plant received oil for the first time, said
Shell's Chief Financial Officer.
The 325,000 barrel-per-day (bpd) atmospheric crude
distillation unit that started processing on Thursday combines
with existing crude units to give Motiva's Port Arthur, Texas,
refinery a total crude oil refining capacity of 600,000 bpd,
said Shell Chief Financial Officer Simon Henry during the
company's first quarter earnings call.
The start-up of the crude unit culminates a 5-year,
estimated $7-billion project to expand the refinery and
continues the growth of Gulf Coast refining capacity started by
Marathon Petroleum Corp, with the doubling of capacity
at its 464,000 bpd Garyville, Louisiana, refinery in 2010.
The importance of the Gulf Coast as the nation's refinery
row was heightened by the shutdown of Sunoco Inc and
ConocoPhillips refineries in Pennsylvania late last
Preparing for the expansion is also part of the reason
imports of crude oil from Saudi Arabia have jumped by 350,000
bpd to average 1.5 million bpd this year, compared to an 1.15
million bpd in 2011, according to weekly data from the U.S.
Energy Information Administration.
Traders and analysts say part of the growth was aimed at
building up inventories at the refinery ahead of the expansion
With the startup of the new Port Arthur crude unit, Exxon
Mobil Corp's 560,640 bpd Baytown, Texas, refinery
becomes the nation's second-largest refinery.
Work continues on other new units at the Motiva Port Arthur
refinery, Henry said, with a new hydrocracker expected to begin
production later in the second quarter.
Hydrocracking units use hydrogen to extract more motor fuel
from crude oil and boost diesel production.
The refinery is expected to reach full capacity sometime in
the third quarter of this year, most likely in September,
according to sources familiar with refinery operations.
In the coming weeks, Motiva will to shut a delayed coking
unit and an existing vacuum crude distillation unit for planned
A crude distillation unit does the initial refining of crude
oil and makes feedstock for all other units.