A spokeswoman for Motiva Enterprises says the company will not add processing capacity to its Port Arthur, Texas refinery because it wants to avoid similar shutdowns the company experienced last year in the aftermath of Hurricane Harvey. Reuters photo by Adrees Latif.

Motiva Enterprises is US refining unit of Saudi Aramco

Reuters reports that Motiva Enterprises, the US refining unit of Saudi Aramco, has decided to not add processing capacity to its only US refinery in Port Arthur, Texas, refinery.

A company spokeswoman says the decision was made after company officials weighed the fallout from flooding and other damage due to Hurricane Harvey which knocked out nearly one quarter of all US crude capacity August.

Just two months ago, the company’s chief executive Brian Coffman, said Motiva was considering adding up to 900,000 barrels per day (b/d) of processing capacity to 603,000 b/d facility.

Spokeswoman Angela Goodwin told Reuters that while the company says it is committed to “investigating opportunities to return to a refining scale of 1 million to 1.5 million b/d, we do not expect to achieve this increased refining scale through the Port Arthur Refinery”.

She added “we are actively exploring a number of opportunities and locations as part of our growth strategy”.  Goodwin said Motiva is adding more pumps to its Port Arthur facility to help handle storms in the future.

According to Reuters, Goodwin says “commercial sensitivity” precludes her from discussing why the company shifted away from its plans to expand the Port Arthur refinery, but Reuters’ sources say the shutdown following Hurricane Harvey is a reason for the decision.

“They’re not going to do it in Port Arthur,” one of the sources told Reuters. “They don’t want all of their capacity shut like it was during Harvey. They still want to be making gasoline somewhere else while everyone is shut during a storm.”

Hurricane Harvey dropped over 60 inches of rain over southeastern Texas.  It shut down Gulf Coast refineries that produce one-quarter of US production of gasoline, jet fuel and diesel and most of its fuel exports.

Harvey caused hundreds of millions of dollars in damage to energy infrastructure alone and caused a spike in oil prices for weeks.

Other US Gulf Coast refiners, including Exxon and Total SA say they are boosting their storm defences. As well, an industry group is looking for federal funding to pay for an offshore dike that would protect the refining area from devastating storm surges.

“We, along with a broad coalition of our industry peers, have asked federal officials to build a ‘coastal spine,’ a protective barrier,” Chevalier Gray, spokeswoman at LyondellBasell Industries told Reuters.  LyondellBasell operates a Houston refinery which sits on higher ground and was able to maintain operations during Harvey.

Total says it is adding generators and pumps at its 224,500 b/d Port Arthur refinery, according to spokeswoman Marie Maitre.  Total’s refinery was shut down due to a power outage during Harvey.

And Exxon is raising an existing 10-foot flood wall by four feet at its refinery in Beaumont, Texas, according to Reuters’ sources familiar with operations.  Exxon is considering expanding the facility as well as two other plants on the Gulf Coast to double its processing capacity for US shale oil.  A final decision on the expansion has not yet been made.