1. Shell Motiva Texas crude unit to create largest U.S. refinery

Apr 12th, 2012

by John Donovan.

Thu Apr 12, 2012 12:48pm EDT

* Expansion will make Motiva Port Arthur largest U.S. refinery

* Coker to be shut for work later this month -sources

* Vacuum unit to be shut in May for overhaul -sources

By Erwin Seba

HOUSTON, April 12 (Reuters) – Motiva Enterprises LLC's Port Arthur refinery is on track to become the largest in the United States by September when its capacity reaches planned rates of 600,000 barrel per day (bpd) with the addition of a 325,000 bpd crude distillation unit, expected to begin start-up by late April.

The start-up is not expected to bring a surge in production along the Gulf Coast as Motiva plans to carry out repairs on other production units as well as take its time starting the new unit to iron out any kinks.

The start-up will coincide with the shutdown of a 58,000 bpd coking unit for a five-week overhaul on the Texas-Louisiana border, which has a current crude oil throughput of 285,000 bpd, the sources said.

After the new crude distillation unit (CDU) completes its initial start-up, expected by mid to late May, Motiva plans to shut a 180,000 bpd vacuum crude distillation unit for an overhaul, expected to last at least four weeks, the sources said.

Motiva was unavailable to comment on refinery plans.

The vacuum unit will not be taken out of production until the new CDU is running smoothly.

"They want to make sure they have the new one running before they shut the old one," one source said.

The start-up of the new CDU has been planned in the second quarter of 2012 for several months, but could be moved if problems develop with the new equipment, the sources said.

The new CDU is expected to reach full capacity in September, according to the sources. At that time, the refinery's total crude oil refining capacity is planned to be 600,000 bpd, creating the largest refinery in the United States.

"They're in the transition from construction to start-up," a source said. "They're checking everything and making sure all the bolts are tight."

Currently, Exxon Mobil Corp's 560,640 bpd Baytown, Texas, refinery is the nation's largest.

Improvements in operating efficiency of the new crude unit are expected to lift the refinery's maximum crude throughout capacity to about 660,000 bpd by sometime in 2013, sources have said.

Motiva began construction on the expansion of the Port Arthur refinery in 2007. The project was originally budgeted at $5 billion, but analysts have said the price tag has reached $7 billion. Motiva has declined to disclose the current cost of the expansion.

The expansion was originally planned to begin operation in 2010, but was delayed in part by a year-long review of costs in 2009 ordered by Motiva partner Saudi Refining to examine spending.

Motiva is a 50-50 joint venture between Royal Dutch Shell Plc and Saudi Refining.

The project was first announced during the 2002-2008 period referred to by U.S. refiners as the "Golden Age," when high global demand for motor fuel drove refining margins to historic highs.

The downturn in demand brought about by the global recession that began in 2008 has led analysts to question the need for the expansion of U.S. refineries.

The decision by Sunoco Inc to halt East Coast refining operations and ConocoPhillips to shut a Pennsylvania refinery along with higher global demand has since improved returns for U.S. refiners.

A CDU refines crude oil coming into a refinery and provides feedstock for all other refinery units.

A coking unit increases the amount of refined material from a barrel of oil and makes petroleum coke, a coal substitute, from residual crude.

A vacuum distillation unit increases the amount of feedstock made from a barrel of crude oil. 

SOURCE

Posted in: Gulf of Mexico, Motiva, Oil, Reuters, Royal Dutch Shell Plc, Shell, United States.
Tagged: Gulf of Mexico · Motiva Enterprises · Oil · Royal Dutch Shell Plc

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Shell says sees no oil leaks from Gulf of Mexico wells

Apr 12th, 2012

by John Donovan.

Thu Apr 12, 2012 1:48pm EDT

* Shell says sheen is estimated at 6 barrels
* Sheen spotted near Shell's Mars and Ursa oil platforms
* Shell says sees no leaks from its operations
* Regulator says sheen near a natural seabed seep
* Shell shares pare earlier losses

By Kristen Hays

HOUSTON, April 12 (Reuters) – Royal Dutch Shell said an oil sheen near two of its offshore Gulf of Mexico oil and natural gasplatforms was estimated to total about six barrels of oil and that its seabed wells showed no signs of leaks.

Shares of Shell traded on the New York Stock Exchange were up 39 cents, or less than 1 percent, at $68.14 at midday. The stock closed down less than 1 percent in London after falling as much a 5 percent earlier in the day, temporarily erasing about $5 billion in value from Europe's largest oil company by market capitalization.

The company, based in the Hague, said the source of the one-mile by 10-mile sheen was unknown.

News of the sheen came nearly two years after BP Plc's deep sea Macondo well blew out on April 20, 2010, killing 11 workers and spewing more than 4 million barrels of oil into the Gulf of Mexico.

The U.S. Bureau of Safety and Environmental Enforcement (BSEE), which regulates offshore oil and gas activity, said on Thursday that its personnel spotted the sheen near Shell's Mars and Ursa platforms and notified the company.

Shell said a Marine Spill Response Corp vessel with skimming and boom capability was on site near the platforms. The company also deployed two remote operating vehicles (ROVs) to inspect the seabed oil equipment in the area and to search for naturally occurring seeps in the ocean floor.

ROVs were assessing permanently plugged wells in the surrounding area "and a known natural sea floor seep located in proximity of the sheen," the BSEE said.

Shell spokeswoman Kelly Op de Weegh added that the ROVs were "checking the whole area," including wellheads, pipes and other equipment for both the platforms, and so far no leaks or plumes have been found.

The company said in a statement that although Shell is confident that the sheen did not originate from its operations, the company would continue to respond.

BSEE said it also has directed pipeline companies with operations in the area to survey their lines.

A U.S. Coast Guard helicopter also was sent to investigate the sheen at about 9 a.m. local time (1400 GMT).  "We are treating this very seriously, as we do all reports of possible pollution," Coast Guard Capt. Jonathan Burton said in a statement. "We will ensure that all measures are taken to fully investigate and, if necessary, mitigate any impact this could potentially have."

The earlier drop in the company's London-listed share price showed that investors remain anxious over potential oil accidents two years after the BP offshore spill, the worst ever in the United States.

Shell had reported the sheen to the National Response Center, which is run by the Coast Guard and monitors marine oil spills, pipeline leaks and other incidents of pollution.

Shell owns a 71.5 percent interest in Mars and a 45.4 percent stake in Ursa, and operates both. BP owns a 28.5 percent stake in Mars and a 22.7 percent interest in Ursa.

The Mars platform can produce up to 160,000 barrels of oil and 121 million cubic feet of natural gas per day. Ursa can produce up to 150,000 barrels of oil and 400 million cubic feet of gas per day.

Both are about 130 miles (209 km) southeast of New Orleans, and are about seven miles (11 km) apart.

The Marine Spill Response Corp is a nonprofit organization created in 1990 by the oil and shipping industries to enable members to fulfill requirements of the U.S. Oil Pollution Act of 1990.

SOURCE

Posted in: Alaska, BP, Environment, Gulf of Mexico, Oil, Oil Spill, Reuters, Royal Dutch Shell Plc.
Tagged: BP · Gulf of Mexico · Oil · Royal Dutch Shell Plc

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