Marathon Restarts Refinery Shut Down by Fire

Marathon Petroleum this week restarted a rebuilt reformer at its Galveston Bay refinery, which was shut down by a fire that killed one employee and damaged much of the refinery in May.

The restarted reformer has a capacity of 75,000 barrels daily and the Galveston Bay facility itself can process close to 600,000 barrels of crude daily. The refinery can process a wide variety of crude oils into gasoline, distillates, natural gas liquids and petrochemicals, heavy fuel oil, and propane.

It is the fourth-largest refinery in the United States.

It seems the refinery has been having more than its fair share of bad luck because, in September this year, Marathon Petroleum shut down its gasoline-making unit due to another fire breaking out in it. The unit has a capacity of 140,000 barrels daily.

Refiners in the United States faced an uphill battle last year to respond to demand for fuels after the end of the pandemic lockdowns, as capacity shrunk while demand increased, albeit modestly.

ExxonMobil, Valero, and Marathon Petroleum are currently working on the expansion at three large refineries, which will bring a combined 350,000 barrels per day of additional crude distillation capacity to the United States.

The refineries that will see their capacity expanded are Exxon's refinery in Beaumont, Valero's Port Arthur refinery, and Marathon Petroleum's Galveston Bay facility, all in Texas.

However, some 1 million bpd of refinery capacity in America has been shut permanently since the start of the pandemic, as refiners have opted to either close losing facilities or convert some of them into biofuel production sites.

Operable refinery capacity was at just over 18 million bpd in 2021, the lowest since 2015, per EIA data from 2022. At the start of 2023, it was 18.1 million barrels daily, up by 0.6% from the start of 2022, the EIA said.

By Charles Kennedy for Oilprice.com

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