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Work to begin on Motiva’s $500M Maurepas Pipeline by end of this year

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Anna Thibodeaux: October 3, 2015

Construction will begin on Motiva’s $500 million Maurepas Pipeline in the fourth quarter of this year.

“The Maurepas Pipeline is the initial step for Motiva to interconnect and optimize its Gulf Coast refinery operations,” said Kiley Roberson, company spokesman for Tulsa, Okla.-based SemGroup Corp., which will build and own the pipeline.

SemGroup has partnered with Rose Rock Midstream, which will serve as the pipeline operator.

“The Maurepas Pipeline project is a critical first step for Motiva to connect its two refineries in Louisiana to create what Motiva calls its Louisiana Refining System,” Roberson said. “With an integrated crude capacity over 500,000 barrels per day, Motiva’s Louisiana Refining System will rank in the top five of North American refineries in terms of total capacity, creating significant value for Motiva.”

Roberson added, “The economic benefits of the pipeline construction and refinery integration — direct, indirect and induced — are expected to be more than $1.6 billion.”The direct, indirect and induced state and local tax benefits are expected to be in the range of $34.6 million, he said.

Pipeline construction could create up to 500 temporary jobs at the peak of construction.

According to Dan Romasko, president and CEO of the Houston-based Motiva Enterprises, the company is creating a world-scale integrated refining system with its Louisiana refineries in Convent and Norco.

Romasko said the multi-phase project is aimed at interconnecting and optimizing Motiva’s refinery operations, a company equally owned by affiliates of Saudi Aramco and Royal Dutch Shell Plc.

In the first phase, the pipeline system will be comprised of three pipelines that will be built, owned and operated by affiliates of SemGroup, a midstream service company.

According to SemGroup CEO Carlin Conner, “This $500 million investment will expand SemGroup’s scale and customer base, creating a more diversified midstream company.”

In March, SemGroup selected Quanta Services, whose subsidiaries including Price Gregory International, QPS Engineering and Quanta Capital Solutions, which assisted with engineering, procurement and construction.

The project would also represent the company’s first “asset development project” in the Gulf Coast region.

According to SemGroup, the project will include a 34.2 mile crude oil pipeline connected to LOCAP, crossing the Mississippi River to Motiva’s Norco refinery; a 12-inch, 35-mile intermediates pipeline between Motiva’s Norco and Convent refineries, and a six-inch, 34-mile intermediates pipeline between the two refineries.

The planned Maurepas Pipelines will connect the existing LOCAP terminal in St. James parish, to the Norco refinery via a 34-mile pipeline, significantly improving access to domestic crude oil, he said.

The Maurepas 35-mile and the 34-mile intermediates pipelines will directly connect the Norco and Convent refineries supporting optimization of both plants’ conversion units while improving logistics efficiency, alleviating dock congestion and allowing additional product exports.

When the pipelines are complete, Motiva plans to idle its 92,000-barrel-per-day gasoline-producing fluid catalytic cracker at its Convent refinery.

According to Don Weaver, general manager, “The completion of the Louisiana integration project will ultimately improve the reliability of feedstock and products for the Norco Manufacturing Complex ensuring our competitiveness within this growing market.”

Additionally, Motiva intends to reconfigure the existing hydrocracker unit at its Norco refinery to process an additional 30,000 barrels a day of gas oil into high quality diesel. The unit produces 238,000 barrels of diesel a day, which has become a lucrative export for U.S. Gulf Coast refiners.

The integration is expected to be complete by end of 2017.Salaried staff may be combined, but hourly employees, who are represented by the United Steelworkers union (USW), will continue to operate separately, according to news reports.

On a combined basis, the Louisiana Refining System is expected to drive incremental annual benefits of $350 million of EBITDA.

Motiva refines, distributes and markets petroleum products. With three refineries in the U.S. Gulf Coast region, Motiva has a combined capacity of more than 1.1 million barrels per day.

The company’s marketing operations support a network of about 8,300 Shell-branded gasoline stations in the eastern and southern United States.

SOURCE

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