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MarketWatch: Motiva refinery expansion under approval – Aramco official

Last Update: 2:57 PM ET Nov 20, 2006

DAMMAM, Saudi Arabia (MarketWatch) — Saudi Arabian Oil Co., or Aramco, is proceeding with plans to double capacity at the Motiva refinery in Port Arthur, Texas, which the company jointly owns with Royal Dutch Shell PLC, a senior Aramco executive said Monday.

“We are going through our own approval process and our partner Shell is going through their own approval process,” Aramco’s Senior Vice President Khalid al-Falah said on the sidelines of the Saudi Energy Forum in Dammam. “We have been granted all the licensing that we need and the project is proceeding.”

Final approval of the project is expected by mid-2007, Motiva said in a statement on Nov. 15. The statement also said that the Texas Commission on Environmental Quality, or TCEQ, had granted the operating permit for the refinery’s existing operations and for the proposed crude capacity expansion project.

The expansion will raise the refinery’s total capacity by 325,000 barrels a day to 575,000 b/d, making it the largest refinery in the U.S. Completion is targeted for 2010.

Oil companies, including Aramco and Shell, are building new oil refineries and expanding existing ones to meet rising global demand for refined products. No new refineries have been built in the U.S. since the 1970s due to tight environmental regulations and extended periods of low margins in the business. While some of the existing U.S. plants have been expanded, refinery capacity has still fallen short of rising demand for fuel products.

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