Motiva’s plan to integrate its two Louisiana refineries in Norco and Convent would create the Louisiana Refining System, a move that would rank it among the top five North American refineries in capacity.
“We are creating a world-scale, integrated refining system that leverages the best aspects of our two Louisiana refineries in Convent and Norco,” Dan Romasko, president and CEO of the Houston-based Motiva Enterprises, announced last Thursday. “At 620,000 barrels per day, our Port Arthur refinery is already the largest refinery in North America and benefits from this scale and efficiency.”
Romasko said the multi-phase project is aimed at interconnecting and optimizing Motiva’s refinery operations, a company equally owned by affiliates of Saudi Aramco and Royal Dutch Shell Plc.
In the first phase, the $500 million Maurepas pipeline system will be comprised of three pipelines that will be built, owned and operated by affiliates of Tulsa, Okla.-based SemGroup Corp., a midstream service company. At completion, the system would have crude capacity of more than 500,000 barrels a day.
According to SemGroup CEO Carlin Conner, “This $500 million investment will expand SemGroup’s scale and customer base, creating a more diversified midstream company.”
The project, to be called Maurepas Pipelines, would also represent the company’s first “asset development project” in the Gulf Coast region.
According to SemGroup, the project will include a 34.2 mile crude oil pipeline connected to LOCAP, crossing the Mississippi River to Motiva’s Norco refinery; a 12-inch, 35-mile intermediates pipeline between Motiva’s Norco and Convent refineries, and a six-inch, 34-mile intermediates pipeline between the two refineries.
The project is expected to be operational by end of next year.
The planned Maurepas Pipelines will connect the existing LOCAP terminal in St. James parish, to the Norco refinery via a 34-mile pipeline, significantly improving access to domestic crude oil, he said. The Maurepas 35-mile and the 34-mile intermediates pipelines will directly connect the Norco and Convent refineries supporting optimization of both plants’ conversion units while improving logistics efficiency, alleviating dock congestion and allowing additional product exports.
When the pipelines are complete, Motiva plans to idle its 92,000-barrel-per-day gasoline-producing fluid catalytic cracker at its Convent refinery.
According to Don Weaver, general manager, “The completion of the Louisiana integration project will ultimately improve the reliability of feedstock and products for the Norco Manufacturing Complex ensuring our competitiveness within this growing market.”
Additionally, Motiva intends to reconfigure the existing hydrocracker unit at its Norco refinery to process an additional 30,000 barrels a day of gas oil into high quality diesel. The unit produces 238,000 barrels of diesel a day, which has become a lucrative export for U.S. Gulf Coast refiners.
The integration is expected to be complete by end of 2017.Salaried staff may be combined, but hourly employees, who are represented by the United Steelworkers union (USW), will continue to operate separately, according to news reports. The announcement comes weeks after the United Steelworkers Union went on strike but worked out a deal with Shell/Motiva and began returning to work. On a combined basis, the Louisiana Refining System is expected to drive incremental annual benefits of $350 million of EBITDA.
Motiva refines, distributes and markets petroleum products. With three refineries in the U.S. Gulf Coast region, Motiva has a combined capacity of more than 1.1 million barrels per day. The company’s marketing operations support a network of about 8,300 Shell-branded gasoline stations in the eastern and southern United States.