Actionable insights straight to your inbox

Newest And Largest US Refinery To Operate Under Capacity

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
Michael Teague is a staff writer for Equities.com. His previous experience includes three years as the associate editor of Los Angeles-based Al Jadid Magazine, a bi-annual review of the arts & culture of the Middle East, where he contributed many articles on the region in the form of features and book & film reviews. His educational background includes a BA in French literature from the University of California, Irvine, where he developed a startling proclivity for anything having to do with the 19th century.
Michael Teague is a staff writer for Equities.com. His previous experience includes three years as the associate editor of Los Angeles-based Al Jadid Magazine, a bi-annual review of the arts & culture of the Middle East, where he contributed many articles on the region in the form of features and book & film reviews. His educational background includes a BA in French literature from the University of California, Irvine, where he developed a startling proclivity for anything having to do with the 19th century.

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.