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Exclusive: Largest U.S. refinery to run below capacity for months

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HOUSTON | Fri Aug 16, 2013 12:45pm EDT

(Reuters) – A new piping problem may force the newest crude distillation unit at Motiva’s Port Arthur refinery, the largest plant in the United States, to run up to 75,000 barrels-per-day below capacity through fall of next year.

Sources familiar with refinery operations said one of the pipes taking crude oil into the 600,000 bpd refinery’s new CDU has suffered continuous vibration problems when it runs at or near full capacity for more than five months.

The 325,000 bpd CDU, called VPS-5 by Motiva, has been running between 250,000 bpd and 285,000 bpd since resuming production early this year following a chemical leak in June 2012. That leak came just as the new unit – the centerpiece of a 5-year, $10 billion expansion of the plant – came online.

That mishap, which rocked oil markets anticipating the start up of the massive expansion for months, forced Motiva partners Saudi Aramco SDABO.UL and Royal Dutch Shell (RDSa.L) to idle the CDU for 7.5 months to replace miles of stainless steel piping in the unit pitted and scarred by corrosive chemicals.

To fix the current pipe vibration issue permanently, Motiva may shut the unit as early as the fall of 2014 for an overhaul, one of the sources said. The pipe in question is one of two 16-inch pipes taking crude oil from a 5-foot diameter pipe that feeds the unit.

“They want VPS-5 to run more than a year and then take it down for what they will call ‘routine inspection,’ so they can make the repairs,” one of the sources said.

A Shell spokeswoman declined comment, saying only that “in keeping with our disclosure policy, we do not provide details with respect to specific units or information on supply.”

The Motiva Port Arthur refinery is equal to about 3.4 percent of U.S. refining capacity.

A crude distillation unit is the workhorse of a refinery, breaking down crude oil into motor fuels and feedstocks for other production units.

News of the problems with the Motiva plant drove up wholesale prices for refined products in the Gulf Coast last summer.


Motiva also has plans to overhaul another one of the Port Arthur plant’s three CDUs next March, according to the sources. During that work the 185,000 bpd VPS-4 CDU will be shut for at least a month, along with the gasoline-producing fluidic catalytic cracking unit.

VPS-5 is scheduled to remain in operation during the VPS-4 overhaul to maintain production at the refinery, the sources said. Motiva recently reset the start date for the VPS-4 work from February to March.

“They don’t want to overlap turnarounds coming up on gasoline units at other Motiva refineries,” a source said.

Additionally, Motiva’s nearby Convent, Louisiana, 235,000 bpd refinery has an overhaul scheduled for February 2014.

The third Port Arthur CDU, VPS-2, was out of production this week because of a sulfur recovery unit breakdown, but has resumed production.

(Editing by Terry Wade and Andrew Hay)

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