November 4, 2009 at 8:53 pm #2900
Marathon: Garyville Expansion 98% Complete
by Brett Clanton Houston Chronicle November 04, 2009
Marathon Oil Corp. reaffirmed Tuesday that it will complete a major expansion of its Garyville, La., refinery by year’s end as planned despite a sharp downturn in the U.S. oil refining business.
But the Houston-based company said it will shut down about half the plant for maintenance early next year, meaning the entire complex won’t be up and running until the second quarter of 2010.
Projected costs of the 180,000-barrel-per-day addition also have been raised a fourth time. The project is now expected to cost $3.8 billion to $3.9 billion because of weather-related work delays last summer, company officials said.
The company had planned to shut down older units for extended maintenance in early 2010, and that the decision had nothing to do with poor market conditions for refining, Gary Heminger, executive vice president for Marathon’s downstream division, said during a conference call Tuesday to discuss Marathon’s third-quarter earnings.
Marathon’s Garyville expansion has moved forward despite a recession-related drop in demand for gasoline, diesel and other petroleum fuels that has prompted Marathon and rivals including Motiva, Valero Energy, ConocoPhillips to delay or cancel some refinery upgrades and additions.
Valero and Sunoco have permanently closed refineries this year, and analysts predict more facilities will be shut down.
“Any company that runs refineries should be taking a look and determining if there are any that need to be shuttered,” Argus Research analyst Phil Weiss said.
Despite difficult market conditions, Marathon has no plans to close any of its refineries, which are all operating economically, Heminger said.
Marathon’s Garyville plant, the nation’s 18th-largest, can process 256,000 barrels per day of crude oil. With the expansion, the capacity will grow to 436,000 barrels per day, making it the nation’s fourth-biggest.
In 2006, Marathon approved a $3.2 billion budget for the Garyville expansion but in October 2008 boosted the estimate to $3.4 billion amid rising labor and material costs. In August, the price tag jumped again to $3.7 billion because of a delay in receiving some materials and equipment, the company said.
Today, the expansion is 98 percent complete, and some units are in initial start-up phases, Heminger said.
Marathon reported third-quarter net income of $413 million, or 58 cents per share, down from $2.1 billion, $2.90 per share, in the July-to-September period a year ago. Revenue slid 38 percent to $14.5 billion from $23.3 billion a year ago.
Excluding one-time items, Marathon said it made 61 cents per share in the quarter, beating Wall Street expectations.
Marathon said production rose 5 percent in the third quarter to 393,000 barrels of oil equivalent per day. Through the first nine months of 2009, production was up 11 percent, chiefly due to the mid-2008 startup of its Alvheim/Vilje projects in Norway, the company said.
November 4, 2009 at 8:59 pm #5939
Here is Update on the MAP Garyville Refinery & Coker expansion. Garyville was the last US grassroots refinery in(Circ 1976). MAP Garyville, is almost finished adding +180 MBD capacity (~18th largest US) to become a 425 MBD refinery (~4th largest US).
Map has also added a new coker along with several other new units. Garyville’s existing coker had the worlds largest diameter drums and still has a lot of upside processing capability compared other 245MBD refineries.
The price tag on the project has jumped from 3.2 Billion to more than 3.9 Billion due to delays & rising material cost.
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