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Marathon says Detroit project start delayed to 2012
By Haitham Haddadin
NEW YORK, Feb 3, 2009 (Reuters) – Marathon Oil Corp said Tuesday the completion of the upgrade to its 100,000-barrel-per-day Detroit refinery will be delayed to mid-2012 as the company plans spending cuts for this year.The Houston-based company also said in a statement on 2009 capital spending that a project to expand its 245,000 bpd oil refinery in Garyville, Louisiana, was 75 percent complete. It will be finished on schedule in the fourth quarter of 2009.
Marathon had said in late October that its expected delays to the Detroit Heavy Oil Upgrading Project, or DHOUP, which was originally due to be completed in late 2010, but it did not provide a new expected start-up date then.
The company is among several to announce cuts or delays to refinery expansion projects in the United States. Similar announcements have come from Valero Energy Corp, ConocoPhillips and Sunoco Inc.
Construction started in mid-2008 on the DHOUP project, which will boost the Detroit refinery’s capacity to about 115,000 bpd by expanding its ability to process crude from Canadian oil sands.
“In order to better align timing of the DHOUP completion with changes in Canadian oil sands production projections and to optimize the completion of this project, the scheduled start-up date has been deferred until mid-2012,” it said.
The Detroit project cost has increased about 15 percent to $2.2 billion due to additional costs linked to the deferral “as well as a scope change that will allow the Detroit refinery to process heavier and higher acidic crudes,” Marathon added.
Marathon — which on Tuesday posted a fourth-quarter net loss and announced cuts to total 2009 spending — said its refining, marketing and transportation spending was expected to total $1.9 billion this year, down from $2.9 billion in 2008.
The 2009 downstream budget includes nearly $1 billion for the Garyville project and $330 million for the Detroit refinery upgrade and the rest for maintenance and other spending. The Garyville expansion will increase that refinery’s capacity to process heavy crude by 180,000 bpd.
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Chevron plans put on hold due to economy
Associated Press – February 3, 2009 8:54 AM ET
PASCAGOULA, Miss. (AP) – Chevron Corp. has delayed plans to build a plant at its Pascagoula refinery to test a process that could boost the yields of products refined from heavy oil.
Construction on the plant, which had received needed permits, was to begin this year. Chevron says it will review the project in 2010.
The facility was to have a daily capacity of 3,500 barrels.
Chevron Mississippi spokesman Steve Renfroe says the delay is due to the dropping price of crude oil. What the project would do is turn heavy crude oil into cleaner burning fuels like jet fuel, gasoline and diesel. The company has been researching the technology since 2003.
Renfroe says the economic conditions that caused the delay will give the company a chance to make improvements before construction begins.
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Here are news updates on Marathon Detroit Refiney expansion/Coker project (DHOUP) which started in 2008 but will delay completion till mid 2012 compared to previous 2010 – (possibly to link up with CA crude P/L completion?). The news article mentions the Marathon Garyville expansion project is 75% completed and is on target for 4Q2009.
A news update on CVX Pascagoula VRSH (Vacuum Resid Slurry Hydrocracker) Hvy Oil technology & its new 3.5 MBD commercial unit (scaled up from R&D pilot plant) has been put oh Hold due economy, with review set for 2010 & chance add some R&D improvements. This had been touted as new (? – it is similar to ENI EST – ENI Slurry Technology Hydrocracker process) alternate to coking process. The rest of CVX Pascagoula Refinery expansion set complete in 2010 was not mentioned.
Both these delays are examples of several of US & Global refinery & coking projects which seem to be setting up two expansion periods – those in EPC stage are falling in a 2006-2010 time frame and those in Planning & FEED stage are falling into a 2011-2015 time frame which is similar to what happened in the last coker cylce of this magnitude in the 1996-1999 time frame and the later 2000-2005 cycle. Both end year & leading year of new cycle had few projects due to crude differentials, refinery & coker margins.
Regards
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