Exxon Mobil Corporation XOM will significantly increase gasoline and diesel production at its Beaumont refinery in Texas after completing a $1.2-billion expansion planned about a decade ago, per a report by Reuters.
This will be the first major expansion to U.S. crude oil processing in about 10 years. The Beaumont refinery processes nearly 369,000 barrels per day of crude oil and manufactures 2.8 billion gallons of gasoline per year.
The commencement of a 250,000-bpd crude distillation unit (“CDU”) at the refinery is expected this month, making Beaumont the second-largest refinery in the United States. The CDU will increase the refinery’s capacity by 68%.
CDUs initially convert crude into feedstocks for other units at the refinery. The equipment will not generate big new volumes of gasoline and diesel instantly. The company plans to advance the new CDU slowly to cope with potential startup problems.
The refinery expansion is taking place when U.S. President Joe Biden has been urging refiners to produce more fuels or face penalties. The expansion will likely create 120,000 bpd of refined products, including gasoline, diesel and jet fuel, and supply feedstocks for its other Gulf Coast refineries.
ExxonMobil did not provide information about the initiation of the Beaumont Light Atmospheric Distillation Expansion (“BLADE”) project, a new processing facility. The company’s crude oil extracted from the Permian shale play in West Texas and New Mexico was planned to be processed by BLADE.
According to a U.S. Energy Information Administration report, six crude oil refineries in the United States have shut down, dropping the U.S. capacity from 18.98 million bpd to 17.9 million bpd since the onset of the coronavirus pandemic.
ExxonMobil’s Beaumont refinery expansion marks a return to the time of steady refining capacity gains through processing modifications and adding new equipment to existing facilities. The expansion will help rebalance global markets and reduce product cracks.
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