U.S. and Canadian Petroleum Refiners Plan $1.6 Billion in FCCU Projects

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Researched by Industrialinfo.com (Industrial Information Resources, Incorporated; Houston, Texas). U.S. and Canadian petroleum refiners are developing an increasing number of Fluid Catalytic Cracker Unit (FCCU) capital projects. According to Chris Paschall, VP Petroleum Refining Industry for Industrialinfo.com, "The reason for this increase in FCCU project activity can be attributed to the fact that refiners are looking for any way possible to increase gasoline production." Both crude oil prices and refining margins are at historically high levels. As refining margins remain strong, refiners are looking for ways to invest profits and to produce as much gasoline as possible. This has led to a number of big dollar developments. Mr. Paschall goes on to state, most refiners are looking to increase production of gasoline through expansion, incremental creep of, or yield increases to the FCCU."

In a typical fuels refinery, the FCCU, considered the heart of the petroleum refinery, produces the majority of the gasoline. So, most plans to increase gasoline production involve expansion, addition, upgrade, or debottenecking of the FCCU unit. Industrialinfo.com is currently tracking 47 active FCCU projects at refineries in the U.S. and Canada. These projects, scheduled to begin construction between August 2005 and 2011, represent nearly $1.6 billion in total investment value (TIV).

Click on the image at right to view a chart showing the number of FCCU projects by market region.

Most of the increase in gasoline production will be achieved through three options: 1) FCCU expansion or addition of a new unit, increasing the charge rate or throughput of the unit, 2) Incremental creep, which involves sequential debottleneck of the FCCU, and/or 3) Increasing the yield of the FCCU through upgrades to the unit.

In some cases, the addition of a new FCCU is tied into a large-scale expansion of the refinery, such as is the case with Marathon Ashland Petroleum LLC's studies for a $900 million refinery expansion in Louisiana.

So far in 2005, the U.S. has imported about 11% of its gasoline consumption. Imports are at a historically high rate. The majority of U.S. imports of gasoline come from Europe, Canada, and Latin America. There are about 160 operating refineries in the U.S. Utilization rates at these refineries are very high.

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