CHEVRON DETAILS PORT ARTHUR REVAMP

Chevron U.S.A. Products Co. will reconfigure its Port Arthur, Tex., refinery by eliminating outmoded equipment.

The revamp will cut operating costs as well as future costs of complying with expected environmental rules.

Central to the overhaul is converting the 315,000 b/cd plant to a single train configuration that will reduce crude capacity to about 200,000 b/cd.

Lower throughput will allow Chevron to cut employment at the plant by about 700 to a workforce of about 1,200. Lance Gyorfi, general manager of the plant, said the company will begin reducing the plant's workforce in May.

Ken Derr, Chevron Corp. chairman and chief executive officer, announced early this year that Chevron was considering major changes at its Port Arthur refining complex as part of a companywide plan to improve competitiveness (OGJ, Jan. 20, p. 29).

Chevron will begin reconfiguring the plant in early April and complete changes before the end of 1992. All units to be shut down will be off line by the end of May. The salvage value of idled equipment will offset the cost of disassembly.

The single train configuration is expected to increase by about 10% the plant's gasoline and diesel fuel yield per barrel of crude processed and improve net margins by about $2/bbl. Much of the gain will result from reduced maintenance, energy use, and personnel costs.

PRODUCT SLATE

Chevron's fuel slate after reconfiguration will be about 95,000 b/cd of gasoline, 40,000 b/cd of diesel fuel with a sulfur content of about 0.05 wt %, and 30,000 b/cd of jet fuel.

Other than eliminating 10,000 b/sd of lube production capacity, Chevron's slate of other products will remain unchanged (OGJ, Dec. 23, 1991, p. 39). Plant-wide products output will more closely match Chevron's regional marketing needs, reducing plant sales on spot markets.

The reconfiguration is expected to reduce capital investment at the plant by about two-thirds during the next 5 years. Chevron had expected to spend about $1 billion in that time for efficiency upgrades and to comply with environmental rules.

About 70% of remaining capital spending during the next 5 years will be to satisfy environmental requirements at the refinery.

Gyorfi said the new configuration will decrease the average age of equipment at the plant to 15 years from 30 years and make it one of the most modern, competitive refineries on the Gulf Coast.

"I'm confident the plan we have developed jointly with employees, union leaders, and the local community will be effectively implemented, avoiding closure of the refinery and loss of hundreds of additional jobs," he said.

RECONFIGURED PLANT

Chevron's reconfiguration will cut vacuum distillation capacity to about 90,000 b/sd from about 156,000 b/sd, hydrotreating capacity for straight run distillate to 105,000 b/sd from 169,000 b/sd, fluid catalytic cracking capacity to 60,000 b/sd from 120,000 b/sd, and catalytic hydrotreating capacity for naphtha desulfurization to 44,100 b/sd from 67,100 b/sd.

The company also plans to eliminate 23,000 b/sd of semiregenerative catalytic reforming capacity and 13,906 b/sd of lube oil polishing charge capacity.

Chevron will retain 35,000 b/sd of delayed coking capacity and 44,100 b/sd of cyclic catalytic reforming capacity.

Before settling on the reconfiguration plan, Chevron considered three other options:

Selling the refinery.
Operating it as a joint venture.
Operating only the petrochemical units of the plant, a choice that would have eliminated about 1,600 jobs.

Chevron is working with the Oil, Chemical and Atomic Workers union and Texas employment officials to set up training or job placement procedures for employees caught in the cutback who can't be transferred to other Chevron plants.

Chevron acquired the Port Arthur refinery in 1984 in a $13.2 billion takeover of Gulf Oil Corp. The plant was built in 1901 by Gulf forerunner J.M. Guffy Petroleum Co. to refine crude from the Spindletop strike into kerosine.