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International Herald Tribune: Shell considers halting U.S. refinery plans

Published: May 21, 2007

SAN FRANCISCO: Royal Dutch Shell, the biggest European oil company, may shelve a joint venture plan to create the largest U.S. refinery because of President George W. Bush’s efforts to reduce gasoline use, a Shell executive said Monday.

“If you’re an investor getting ready to put several billion dollars into expanded capacity, would you do that when the president himself says we want less gasoline?” John Hofmeister, Shell’s top U.S. executive, said at a conference in Santa Clara, California.

At stake is a $3 billion plan by Shell and Saudi Arabia’s state oil company, partners in the Motiva Enterprises venture, to more than double the processing capacity of a refinery in Port Arthur, Texas, to 600,000 barrels of crude a day. Bush called in January for the country to increase use of renewable and alternative fuels to curb reliance on imported oil, seeking a 20 percent reduction in gasoline use by 2017.

Motiva in April 2006 said it planned to begin the expansion in 2007 and complete it in 2010. The expansion would vault the Port Arthur refinery past Exxon Mobil’s plant in Baytown, Texas, currently the largest in the United States.

Bloomberg News

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