Reports: Saudi Aramco Eyes Texas Refinery Purchase

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Researched by Industrial Info Resources (Sugar Land, Texas)-- Saudi Arabian Oil Company (Saudi Aramco) (Dhahran, Saudi Arabia), the national oil company of Saudi Arabia, is part of a joint venture that is the frontrunner to acquire a large oil refinery on the Houston Ship Channel, according to The New York Times and other news sources. Aramco is a 50:50 partner in Motiva Enterprises (Houston, Texas) with Royal Dutch Shell plc (NYSE:RDS.A) (The Hague, Netherlands). But as Aramco and Shell begin to divvy up their assets following a recent agreement, Aramco is set to become the sole player in several key U.S. properties.

The refinery has been put on the sales block by LyondellBasell Industries (NYSE:LYB) (Rotterdam, The Netherlands), which announced its plans to divest the facility last month. Industrial Info is tracking $92.5 million in active projects at the refinery, including $57 million in upgrades.

Among these are the $20 million upgrade to a heavy gas oil hydrotreater and the $20 million upgrade to a gasoline hydrotreater. Plans include enhancing the 49,000-barrel-per-day (BBL/d) heavy gas oil hydrotreater by modifying the main fractionation column and installing a larger reactor, and enhancing the other, 70,000-BBL/d hydrotreater by adding a reactor to reduce sulfur content in gasoline produced. For more information, see Industrial Info's project reports on the heavy gas oil and gasoline hydrotreater projects.

Motiva already owns a refinery in Port Arthur, Texas, which became the largest U.S.-based producer of gasoline, diesel and other petroleum products after an expansion in 2012. Following a recently signed agreement, Aramco will take full control of the Port Arthur refinery in April 2017.

Industrial Info is tracking more than $377 million in active projects at the Port Arthur refinery, including several upgrades that have been delayed due to market conditions. These include the $50 million upgrade of a coker unit and the $20 million upgrade of a hydrotreater unit. Motiva plans to replace four stressed crums at the 58,000-barrel-per-day (BBL/d) coker and add a reactor to reduce sulfur content in gasoline produced by the 67,000-BBL/d hydrotreater. For more information, see Industrial Info's project reports on the coker and hydrotreater upgrades.

Last month, the Motiva joint venture experienced a scare at one of its refineries in Convent, Louisiana, when a heavy oil hydrocracker unit caught fire. The blaze was extinguished within a day, and the company is now planning a $20 million revamp on the 45,000-barrel-per-day unit. For more information, see Industrial Info's project report and August 11, 2016, articles - Motiva Fire in Louisiana Extinguished and Motiva Battles Fire at Convent, Louisiana, Refinery.

Under its recent agreement, Shell will become the sole owner of the Convent refinery around the same time Aramco takes over the Port Arthur refinery. According to Reuters, Aramco also will retain 26 distribution terminals and the Motiva name, while Shell will continue to hold a refinery in Norco, Louisiana, which also features a chemicals plant, and its gasoline stations in Florida, Louisiana and the Northeastern region. According to Forbes, Aramco will be able to use the Shell gasoline brand in Texas, Mississippi, and the Southeast and the Mid-Atlantic regions of the U.S.

Aramco invests in other U.S. properties through Saudi Aramco Energy Ventures LLC, including Siluria Technologies (San Francisco, California), which develops technologies to convert natural gas to liquids. Weak commodity prices have delayed two Siluria projects that are being tracked by Industrial Info: the $500 million construction of an ethylene plant in La Porte, Texas, and the $350 million construction of an ethylene plant in Saint James, Louisiana. For more information, see Industrial Info's project reports on the La Porte and Saint James projects.

Others bidding for LyondellBassell's Houston refinery include Valero Energy Corporation (NYSE:VLO) (San Antonio, Texas) and two Canadian companies, Suncor Energy (NYSE:SU) (Calgary, Alberta) and Cenovus Energy Incorporated (NYSE:CVE) (Calgary), according to The New York Times.

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.