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Motiva to integrate Norco, Convent refineries in Louisiana

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Screen Shot 2015-01-06 at 21.31.0326 March 2015

(Reuters) – Motiva Enterprises said on Thursday that operations at its Convent and Norco, Louisiana, refineries will be integrated to take advantage of increased production of lower-cost U.S. shale oil.

Motiva, which is co-owned by Royal Dutch Shell Plc and Saudi Aramco, said the first step in the integration project is the construction of the Maurepas pipeline system that will bring advantaged crude to the Norco refinery and connect the production systems at the two plants.

After the three-pipeline system is in place, Motiva plans to idle the 92,000-barrel-per-day (bpd) gasoline-producing fluidic catalytic cracking unit (FCCU) at the 235,000 bpd Convent refinery.

The company will also expand by 30,000 bpd the hydrocracking unit at the 238,000 bpd Norco refinery. The Norco hydrocracker currently can process 40,000 bpd of gas oil produced by crude distillation units.

Gas oil produced by the Convent refinery will go to the expanded hydrocracker and 112,000 bpd catalytic cracking unit at the Norco plant.

Diesel, the primary motor fuel produced by hydrocrackers, has become a lucrative export for U.S. Gulf Coast refiners.

“Through the implementation of these projects, we are creating a world-scale, integrated refining system that leverages the best aspects of our two Louisiana refineries in Convent and Norco,” said Dan Romasko, president and chief executive of Motiva in a statement.

Valero Energy Corp has already undertaken a similar shift in production at its Louisiana refineries. Last year, Valoero idled the FCCU at its 125,000 bpd Meraux, Louisiana, refinery and expanded the hydrocracker. Valero now relies on its 205,000 bpd St. Charles refinery in Norco for gasoline production.

The combined plants would be smaller than Motiva’s Port Arthur refinery, the largest in the United States, which the company says has capacity of up to 620,000 bpd.

At the ground level, the Louisiana Refining System, as Motiva plans to call the interconnected plants, will look a lot like two separate refineries, said people familiar with company plans.

Salaried staff may be combined, but hourly employees, who are represented by the United Steelworkers union (USW), will continue to operate separately.

“It’s not really a merger,” said one of the sources. “Convent’s going to shut down its cat cracker and sell the gas oil that would have gone to it to Norco.”
The sources said Motiva plans to complete the integration by the end of 2017. Motiva did not comment on the timeline for the project.

(Reporting By Houston Newsroom; Editing by Ken Wills)

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