Marathon Petroleum Wraps Up Refinery Turnarounds, Prepares for Capital Projects

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Researched by Industrial Info Resources (Sugar Land, Texas)--Marathon Petroleum Corporation (NYSE:MPC) (Findlay, Ohio) recently completed major turnarounds at three Gulf Coast refineries and is ready to take on the summer driving season, which kicks off next month during Memorial Day Weekend. The company hopes for higher margins in the future to take advantage of new throughput capabilities. Industrial Info is tracking $3.51 billion in projects involving Marathon.

In a conference call regarding the Marathon's first-quarter 2017 performance, Chief Executive Officer Gary Heminger said: "First quarter results reflect substantial turnaround activity at our three Gulf Coast refineries. In April, we successfully completed this turnaround activity ahead of schedule, under budget and with exemplary environmental and safety and performance."

Among the beneficiaries of the offline events was the company's refinery in Garyville, Louisiana. "This marked the first set of turnarounds for the Garyville major expansion process units since they came online in late 2009, completing an outstanding seven-plus year run," Heminger said. "During the turnaround, we took the opportunity to upgrade process units such as the hydrocracker at Garyville, which can now operate at 121,000 barrels per day (BBL/d), a 73% increase from its original capacity."

"With our substantial Gulf Coast turnaround activity behind us, we are well-positioned to continue to drive top tier operational, safety and environmental performance and take advantage of increasing refinery margins, favorable crude oil and refinery feedstock purchase costs and seasonal improvement in consumer demand for our products." Among the other refineries with recently completed turnaround activity was the company's Galveston Bay refinery in Texas, where Marathon is planning $1.5 billion in capital spending as part of its South Texas Asset Repositioning (STAR) project, which will integrate the company's Galveston Bay and Texas City refineries to create the second-largest refining complex in the U.S. Among the projects at Galveston Bay is the planned expansion of the refinery's crude units from the existing 487,000 BBL/d by adding 40,000 BBL/d of capacity to improve gas oil and distillate yields. The project has an estimated total investment value (TIV) of $500 million.

Also at the Galveston Bay Refinery, Marathon plans to increase capacity of the existing 60,000-BBL/d residual hydrocracker unit by 20,000 BBL/d to reduce sulfur content. The project has an estimated TIV of $500 million. For more information, see Industrial Info's project report. Both Galveston Bay projects, along with offsite utilities additions, are planned to kick in the first quarter of next year and take about two years to complete.

Marathon Petroleum reported net income of $30 million in first-quarter 2017, compared to $1 million in first-quarter 2016. The company is planning $3.68 billion in capital spending in 2017, including $2.12 billion for midstream projects, which include projects for MPLX LP (NYSE:MPLX) (Findlay), the company's master limited partnership for the midstream and gas processing sectors.

Among the largest MPLX projects being tracked by Industrial Info is the $200 million Phase VII expansion of the Majorsville Natural Gas Processing Complex near Dallas, West Virginia. The project will add an additional 200 million standard cubic feet per day of processing capacity to bring the plant up to 1.27 billion cubic feet per day of Marcellus Shale gas. The project is planned to kick off this summer and be completed in early 2018. For more information, see Industrial Info's project report.

As Marcellus gas continues to flow, among the other MPLX projects being tracked by Industrial Info is a $200 million grassroot natural gas processing plant near Washington, Pennsylvania. The cryogenic complex will process up to 200 million cubic feet per day of natural gas from the Marcellus with a natural gas liquids (NGL) production capacity of 20,000 BBL/d. The project is planned to kick off late this summer and be completed in the first quarter of 2018. For more information, see Industrial Info's project report.

When questioned about President Donald Trump's first 100 days in office, Heminger said the company continues to be happy with the role the administration is playing in the energy sector, especially as the issue of a border tax on oil imports seems to have been dropped from recent rhetoric. "We continue to be very, very positive in this administration and in the president and his outlook on the energy industry ... and with the pipeline permits that have been approved that helped get DAPL [the Dakota Access Pipeline] up and going. We expect mid-May for the first deliveries to come out of DAPL. That is certainly going to be a positive for us and our Midwest refineries. So all in all, [we are] very positive with this administration."

Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, five offices in North America and 10 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle™, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn. For more information on our coverage, send inquiries to info@industrialinfo.com or visit us online at http://www.industrialinfo.com.