Reports related to this article:
Project(s): View 2 related projects in PECWeb
Plant(s): View 2 related plants in PECWeb
Released May 06, 2020 | SUGAR LAND
en
Researched by Industrial Info Resources (Sugar Land, Texas)--After reporting a $9.2 billion net loss for first-quarter 2020 on Tuesday due to sinking fuel demand and other factors,
Industrial Info is tracking nearly $4.6 billion in project activity by Marathon Petroleum. Major projects under construction will not be affected by the cuts, the company said. Industrial Info is tracking $1.8 billion worth of Marathon projects that have not yet reached the construction phase.
Click on the image at right for a graph showing Marathon Petroleum's project activity by industry.
The first-quarter loss compares with a $7 million loss for the same period in 2019. First-quarter 2020 results include pre-tax charges of $12.4 billion primarily related to non-cash impairments, Marathon said.
The $1.4 billion capex cut brings the company's planned capital spending down to $3 billion this year.
The reductions include $250 million in refining, $770 million in midstream (including the fuel logistics master limited partnership MPLX LP (NYSE: MPLX)), $250 million in its retail business and $80 million in corporate expenses. "Remaining capital spend primarily relates to growth projects that are already in progress or spending that supports the safe and reliable operation of our facilities," the company said.
Marathon also said it plans to cut $950 million in operating expenses this year.
Chief Executive Officer Michael Hennigan said during Marathon's earnings conference call that the company was hit hard particularly by falling demand in the upper Midwest and West Coast.
As a result of falling fuel demand due to the COVID-19 pandemic, Marathon has temporarily idled its 26,000-barrel-per-day (BBL/d) Gallup Refinery in New Mexico and its 166,000-BBL/d Martinez Refinery in California.
Hennigan said that going forward, the company expects its total refining crude throughput to be about 2 million BBL/d, roughly two-thirds of its normal capacity. For related information, see May 5, 2020, article - U.S. Refinery Runs Hit Record Lows as $4 Billion in Projects Face COVID-19 Hurdles.
Hennigan said the refining industry is seeing gasoline demand beginning to recover in the U.S. as more people take to the road again after the lifting of stay-at-home restrictions. Jet fuel demand could take longer to recover, but that might mean good news for gasoline demand, as more Americans choose to drive rather than fly to their destinations, he said.
Two Marathon capital growth projects underway include those in Texas and North Dakota.
At Marathon's Galveston Bay Refinery in Texas City, Texas, work continues on a crude unit expansion that will add 40,000 BBL/d to the complex's current capacity of 437,000 BBL/d. Part of the company's South Texas Asset Repositioning (STAR) program, the project will improve gas oil and distillates yields. Fluor Corporation (NYSE:FLR) (Irving) is providing engineering and procurement for the expansion, which is planned for completion in early 2022. For more information, see Industrial Info's project report.
In North Dakota, construction continues on the Dickinson Refinery Renewable Diesel Project, which will convert the 20,000-BBL/d refinery to a 12,000-BBL/d vegetable-oil-to-renewable diesel processing plant; see project report.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 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.
Industrial Info is tracking nearly $4.6 billion in project activity by Marathon Petroleum. Major projects under construction will not be affected by the cuts, the company said. Industrial Info is tracking $1.8 billion worth of Marathon projects that have not yet reached the construction phase.
Click on the image at right for a graph showing Marathon Petroleum's project activity by industry.The first-quarter loss compares with a $7 million loss for the same period in 2019. First-quarter 2020 results include pre-tax charges of $12.4 billion primarily related to non-cash impairments, Marathon said.
The $1.4 billion capex cut brings the company's planned capital spending down to $3 billion this year.
The reductions include $250 million in refining, $770 million in midstream (including the fuel logistics master limited partnership MPLX LP (NYSE: MPLX)), $250 million in its retail business and $80 million in corporate expenses. "Remaining capital spend primarily relates to growth projects that are already in progress or spending that supports the safe and reliable operation of our facilities," the company said.
Marathon also said it plans to cut $950 million in operating expenses this year.
Chief Executive Officer Michael Hennigan said during Marathon's earnings conference call that the company was hit hard particularly by falling demand in the upper Midwest and West Coast.
As a result of falling fuel demand due to the COVID-19 pandemic, Marathon has temporarily idled its 26,000-barrel-per-day (BBL/d) Gallup Refinery in New Mexico and its 166,000-BBL/d Martinez Refinery in California.
Hennigan said that going forward, the company expects its total refining crude throughput to be about 2 million BBL/d, roughly two-thirds of its normal capacity. For related information, see May 5, 2020, article - U.S. Refinery Runs Hit Record Lows as $4 Billion in Projects Face COVID-19 Hurdles.
Hennigan said the refining industry is seeing gasoline demand beginning to recover in the U.S. as more people take to the road again after the lifting of stay-at-home restrictions. Jet fuel demand could take longer to recover, but that might mean good news for gasoline demand, as more Americans choose to drive rather than fly to their destinations, he said.
Two Marathon capital growth projects underway include those in Texas and North Dakota.
At Marathon's Galveston Bay Refinery in Texas City, Texas, work continues on a crude unit expansion that will add 40,000 BBL/d to the complex's current capacity of 437,000 BBL/d. Part of the company's South Texas Asset Repositioning (STAR) program, the project will improve gas oil and distillates yields. Fluor Corporation (NYSE:FLR) (Irving) is providing engineering and procurement for the expansion, which is planned for completion in early 2022. For more information, see Industrial Info's project report.
In North Dakota, construction continues on the Dickinson Refinery Renewable Diesel Project, which will convert the 20,000-BBL/d refinery to a 12,000-BBL/d vegetable-oil-to-renewable diesel processing plant; see project report.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 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.
