Hydrocracker Additions Put Texas, Louisiana at Top of U.S. Refining Industry Spending

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Researched by Industrial Info Resources (Sugar Land, Texas)--Industrial Info is tracking approximately $5.2 billion in U.S.-based Petroleum Refining Industry capital projects that are planned to kick off in the U.S. in 2011. Two hydrocracker additions at refineries owned by Valero Energy Corporation (NYSE:VLO) (San Antonio, Texas) have pushed Texas and Louisiana to the forefront of Refining Industry spending for the year. In total, the two states plan to kick off more than $3.6 billion in Refining capital projects during the year, some of which have already been completed.

Click on image at right for a breakdown by state of U.S. Refining Industry capital projects that are planned to begin in 2011.

Valero is commencing the hydrocracker addition projects this summer at its 310,000-barrel-per-day (BBL/d) Port Arthur Refinery in Texas, and the 250,000-BBL/d St. Charles Refinery in Norco, Louisiana. At both refineries, a 50,000-BBL/d vacuum gas oil hydrocracker will be added to increase the facilities' capacities to process heavier, sour crude oil into cleaner diesel and other refined products. Valero had previously halted the projects at both refineries, placing them on indefinite hold in 2009 because of the economic downturn.

The projects each have an estimated total investment value in excess of $1 billion. The Port Arthur project is expected to be wrapped up in the third quarter of 2012, while the St. Charles Refinery project should be wrapped in fourth-quarter 2012.

The Port Arthur Refinery recently restarted units after an unplanned outage that began earlier this month. On June 6, the facility suffered a lightning strike that badly damaged the compressor on a delayed coker unit, forcing it offline. The associated 75,000-barrel-per-day (BBL/d) crude distillation unit could operate at only minimal rates while the coker was offline. Replacement of the damaged compressor motor was completed over the weekend, allowing the units to commence the restart process.

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