Marathon Petroleum's Detroit Refinery to Build Heavy Oil Upgrade Project

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Researched by Industrial Info Resources (Sugar Land, Texas)--Marathon Petroleum Company LLC (MPC) (Findlay, Ohio), a subsidiary of Marathon Oil Company (NYSE:MRO) (Houston, Texas), is moving forward with construction of the $2.2 billion Heavy Oil Upgrade Project (HOUP) refinery expansion project, after slowing construction in February 2009 due to poor market conditions. Construction began in June 2008, but due to the economic downturn, Marathon cut its capital spending budget 24% from $7.6 billion to $5.7 billion and strategically deferred any further construction on the project, putting off the completion of the major expansion from 2010 until 2012.

The total investment of the project increased from $1.5 billion to $2.2 billion, which will enable the refinery to process heavier and higher acidic crudes. The expansion will increase the refinery's capacity 15% by adding an additional 13,000 barrels per day (BBL/d). This increase will bring the refinery's total capacity from 102,000 to 115,000 BBL/d. The added capacity also will increase the amount of transportation fuels to more than 400,000 gallons per day.

Fluor Corporation (NYSE:FLR) (Irving, Texas) completed the Front End Engineering Design (FEED) for the project, and in late 2007 was awarded the engineering, procurement and construction management contract. Fluor will be finalizing a lump sum contractor over the next few months to work with them on the construction efforts. It is estimated that 800 construction workers a day, and a total of 4 million field construction hours, will be required to complete this major heavy crude oil upgrade project, which is expected in the summer of 2012.

The project will consist of a delayed coker addition. This new unit will be able to convert heavier, asphalt-like feedstocks into liquid petroleum fuel blend components and petroleum coke. They delayed coker also will thermally convert and upgrade heavy crude into products such as gasoline, diesel and petroleum coke. Portions of the project that will include emission reducing technologies will be a sulfur-recovery complex, consisting of the construction of a 280-ton-per-day Claus sulfur recovery unit, as well as a SCOT tail gas treater and ultra-low nitrogen oxide burners. Other units that will be installed include a 33,000-BBL/d distillate hydrotreater and a 58 million-standard-cubic-feet-per-day Hydrogen (H2) Steam Methane Reforming Unit, which will support the refinery's expansion, enabling them to process heavy sour Canadian crude oil. The HOUP will include a major revamp on the existing 102,000-BBL/d unit to account for the 13,000-BBL/d capacity increase for the refinery.

Marathon Petroleum's wholly owned subsidiary, Marathon Pipe Line LLC (MPL), is also constructing a 29-mile, 24-inch-wide pipeline that will replace an existing 16-inch-wide pipeline, currently crossing portions of Monroe and Wayne counties. The new pipeline will connect to Marathon's existing crude oil pipeline to deliver additional supplies of heavy crude oils to the Detroit refinery.

Some of the major equipment that will be installed as part of the HOUP project will include 180 heat exchangers, 16 compressors, 50,000 cubic yards of concrete, 7,700 piles, 100 miles of pipe, and 15 million pounds of steel.

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