Marathon Petroleum Corporation has taken the next step toward a potential $2.2 billion to $2.5 billion upgrade to the company’s refinery in Garyville, Louisiana.
Described by Marathon Petroleum as a Residual Oil Upgrade Expansion, the capital investment would enable the company to convert a byproduct of the refining process – heavy residual oil – into approximately 1.2 million gallons per day of ultra low-sulfur diesel at Garyville. The ROUX project would follow Marathon Petroleum’s $3.9 billion refinery expansion in Garyville, which represented one of the largest manufacturing projects in Louisiana history upon its completion in late 2009. Since that time, the Garyville refinery has more than doubled its refining capacity.
The company plans to file permit applications for the potential project with Louisiana’s Department of Environmental Quality at the end of April. After completing feasibility studies, Marathon Petroleum expects to make a final decision on the project by early 2015. If approved, the project would result in hydrotreating, hydrocracking and desulfurization equipment installations, along with additional infrastructure that would include buildings, tanks, cooling towers, and rail and electrical facilities. The project would create 65 new direct jobs.
“As part of the ongoing feasibility study, Marathon Petroleum is pleased to be taking this next step of submitting the permit applications for the Residual Oil Upgrade Expansion at our Garyville facility,” said Rich Bedell, the company’s Senior Vice President for Refining. “We have been diligently working with the state and local officials concerning the various milestones for a project of this size. If the company decides to move forward, it is anticipated that the construction would begin mid-2015 and be completed in 2018. In addition to the potential refinery jobs, we would estimate that approximately 3,000 construction jobs will be created during the construction phase.”
Governor Bobby Jindal said, “Never before in our state’s history have we seen such extraordinary gains in petroleum-refining technology complemented by favorable oil and gas economics and the most rapidly improving business climate in America – and it’s all happening here in Louisiana. We’re proud that Marathon Petroleum recognizes the unique strengths that Louisiana offers in all of these areas and that the company is capitalizing on this historic opportunity to redefine what leadership looks like in the vitally important energy sector. This latest project proposed by Marathon Petroleum represents yet another opportunity to assert Louisiana’s leadership role as the next great state for business investment and energy growth.”
Should Marathon Petroleum move forward with the project, Louisiana Economic Development would offer a customized incentive package to the company, including a performance-based Modernization Tax Credit of $3 million, along with the services of LED FastStart, the state’s workforce training program. In addition, the company would utilize the state’s Quality Jobs and Industrial Tax Exemption programs.
“Marathon Petroleum is a valued community partner and we are excited that they are exploring new opportunities to expand in St. John the Baptist Parish,” said Parish President Natalie Robottom. “We are proud that the third-largest oil refinery in the country calls St. John Parish home and we look forward to working with them as they continue to invest in our community. Job creation and economic development remain a focus of my administration and this announcement addresses both issues simultaneously.”