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Shell To Restart Major Oil Refinery

Shell is set to restart its 325,700-bpd Deer Park refinery in Texas, after shutting it down for three weeks during and after Hurricane Harvey’s sweep of the U.S. Gulf Coast. By noon on Sunday, the refinery’s biggest crude oil distillation unit, with a capacity of 270,000 bpd, was up and running again. The rest of the units are being restarted currently.

The biggest unit, DU 2, is crucial for the operation of the refinery along with DU 1, which has a capacity of 70,000 bpd, because this is where crude petroleum is initially refined and then fed into the other units of the facility. DU 2 was shut down before Harvey due to a fire that occurred on August 17.

The Deer Park facility is a 50/50 joint venture between Shell and Pemex. The Mexican state company recently had to shut down its biggest refinery in Mexico, Salina Cruz, after a magnitude-8 earthquake shook the country’s southern parts. According to reports from last weeks, it would take between three and four weeks to bring Salina Cruz back online.

Harvey shut down almost a quarter of the production capacity in the U.S. section of the Gulf of Mexico, as well as more than a fifth of the country’s refining capacity.

The news will most likely provide additional support for crude oil prices, which have been enjoying the resumption of demand growth after Harvey in the last week or so. Additional upward pressure came from EIA’s latest International Energy Outlook 2017 report, which forecast a 28-percent increase in global energy consumption in the period to 2040, with crude oil demand growing at a healthy rate despite an overall decline in its share of global consumption from 33 percent in 2015 to 31 percent in 2040.

By Irina Slav for Oilprice.com

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