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Exxon May Expand Beaumont, Texas, Refinery

Exxon's move could be the first major U.S. refinery investment since the sudden rise of shale production opened up a new era of bumper profits for the sector.

Exxon Mobil Corp is weighing a possible multibillion-dollar expansion of its 344,600 barrel-per-day (bpd) Beaumont, Texas, refinery that could make it the nation’s largest by 2020, according to sources familiar with the company’s deliberations. The deliberations at Exxon are focused on the possible addition of a third crude distillation unit (CDU), the sources said, and its size would determine how much capacity would increase.

Exxon has also made plans to replace four coking unit drums in 2015 and add two new coker drums in 2017 at the Beaumont refinery, the sources said. The drums turn residual crude oil into petroleum coke, a coal substitute.

An Exxon spokesman, while declining to discuss possible plans for the Beaumont refinery, said the company is always evaluating growth opportunities.

Though many U.S. refiners have been incrementally adding capacity, Exxon's move could be the first major U.S. refinery investment since the sudden rise of shale production opened up a new era of bumper profits for the sector.

The Exxon investment, if made, would bolster the U.S. Gulf Coast's position as a top exporter of fuels to the world at a time when U.S. demand for gasoline and diesel is falling.

Daniel Luzer is GOVERNING's news editor.
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