Exxon Launches New Unit At Beaumont Refinery

By Charles Kennedy - Apr 06, 2023

Exxon this week started a new crude oil distillation unit at its Beaumont refinery, boosting its daily capacity to almost 620,000 bpd.

This makes the Beaumont facility the second-largest refinery in the United States after Aramco’s Motiva, Reuters reported.

The new unit itself will have a capacity of 250,000 barrels of crude daily and will process light crude from the Permian.

A refinery expansion is a rarity in the United States where the trend in recent years has been to close refineries or convert them to biofuel production plants.

Since 2020, the United States’ total refining capacity has declined by as much as 1 million barrels daily due to seven refinery shutdowns, including facilities operated by Philips 66, Shell, and Marathon Petroleum.

This has crimped fuel production and contributed to a major draw in U.S. distillate stocks over the past year or so. Now, refining capacity is due for deeper cuts—luckily only temporarily.

Last year, as oil prices soared and fuel prices followed, many refineries did not shut down for regular maintenance, eager to take advantage of higher margins. This year, however, maintenance is a must, so there will be twice as many seasonal refinery closures in the U.S. as usual, Reuters reported in January.

Calculations showed that at least 15 refineries would have to shut down for between two and 11 weeks over the first five months of the year.

The expansion of the Exxon refinery in Beaumont will expand U.S. refining capacity considerably but this will also be only temporary. Later in the year, Lyondell Basell will close a refinery in Houston, basically offsetting the Exxon expansion. The Lyondell facility has a capacity of over 260,000 bpd.

Meanwhile, outside the U.S., some 2 million bpd in new refining capacity is due to come on stream this year.