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Newest And Largest US Refinery To Operate Under Capacity

By  +Follow August 16, 2013 8:53AM
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Piping difficulties have forced the newest and largest US crude oil distillation unit (CDU) at Motiva’s Port Arthur refinery to run 75,000 barrels-per-day below capacity, a rate that is expected to continue through the fall season of 2014.

Motiva’s VPS-5 CDU has a capacity of 325,000 barrels-per-day, but has been running as much as 75,000 barrels shy of that after a chemical leak was discovered in June of last year, forcing a shutdown that lasted through to the beginning of 2013. Motiva’s partners in the VPS-5, Saudi Aramco and Royal Dutch Shell ($RDS.A), had to stop the CDU for nearly 8 months in order to repair miles of steel piping.

Sources close to the inner workings of the Motiva refinery have said that the CDU has been hampered by excess vibrations that occur when it runs near full capacity for over five months at a time.  The company’s Port Arthur refinery accounts for some 3.4 percent of refining capacity in the US, but a permanent fix to the problem could require another shut-down in a year’s time.

2014 may turn out to be a tricky balancing act for Motiva, as the company has issues to contend with at a number of its refineries. The VPS-4 CDU, also located in Port Arthur and with a 185,000 bpd capacity, will have to go offline for at least a month for repairs sometime around next March. The date for the work on VPS-4 was pushed back to March from February so that both units will not be down at the same time.

On top of that, Motiva’s Convent, Louisiana refinery, with 235,000 bpd capacity, also has an overhaul scheduled for March of 2014. None of the involved companies have been willing to comment on the issue at any length.

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions.


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By  +Follow August 16, 2013 8:53AM
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