Marathon proposes expansion at Garyville refinery

Marathon Petroleum Corp. is taking the next step toward construction of a proposed $2.2-2.5 billion upgrade to its 522,000-b/d Garyville, La., refinery.

The company plans to file permit applications for the potential project with Louisiana’s Department of Environmental Quality (DEQ) by the end of April, according to a release from the Louisiana Economic Development (LED).

After completing feasibility studies, Marathon expects to make a final decision on the project by early 2015, LED said.

If approved, the project would result in hydrotreating, hydrocracking, and desulfurization equipment installations, along with additional infrastructure that would include buildings, tanks, cooling towers, and rail and electrical installations.

Described by Marathon as a residual oil upgrade expansion, or ROUX, the capital investment would enable the Garyville facility to convert heavy residual oil into about 1.2 million gpd of ultralow-sulfur diesel, according to LED.

While Marathon has only briefly referred to the project in recent presentations to its investors, Rich Bedell, senior vice-president for refining, said the company already has been working with the state and local officials on various milestones for the expansion, according to LED’s release.

If approved, construction would begin mid-2015 and be completed in 2018, Bedell said.

To date, Marathon has sanctioned $130 million for front-end engineering and design, according to a late-March company presentation.

The ROUX project would follow Marathon’s $3.9 billion refinery expansion in Garyville, which represented one of the largest manufacturing projects in Louisiana history upon its completion in late 2009 (OGJ Online, Mar. 31, 2010; Dec. 21, 2009).

If Marathon proceeds with the project, LED said it would offer a customized incentive package to the company, including a performance-based Modernization Tax Credit of $3 million, along with state workforce training program services.

Marathon also would be eligible for the state’s Quality Jobs and Industrial Tax Exemption programs, LED added.

Since commissioning of the 2009 expansion, Garyville has more than doubled its refining capacity to become the third-largest refinery in the US as well as Louisiana’s largest (OGJ Online, Dec. 3, 2012).

Contact Robert Brelsford at rbrelsford@ogjonline.com.

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