Marathon Oil Corp said Tuesday the completion of the upgrade to its 100,000-barrel-per-day Detroit refinery will be delayed to mid-2012 as the company plans spending cuts for this year.
The Houston-based company also said in a statement on 2009 capital spending that a project to expand its 245,000 bpd oil refinery in Garyville, Louisiana, was 75 percent complete. It will be finished on schedule in the fourth quarter of 2009.
Marathon had said in late October that its expected delays to the Detroit Heavy Oil Upgrading Project, or DHOUP, which was originally due to be completed in late 2010, but it did not provide a new expected start-up date then.
The company is among several to announce cuts or delays to refinery expansion projects in the United States. Similar announcements have come from Valero Energy Corp, ConocoPhillips and Sunoco Inc.
Construction started in mid-2008 on the DHOUP project, which will boost the Detroit refinery's capacity to about 115,000 bpd by expanding its ability to process crude from Canadian oil sands.
"In order to better align timing of the DHOUP completion with changes in Canadian oil sands production projections and to optimize the completion of this project, the scheduled start-up date has been deferred until mid-2012," it said.
The Detroit project cost has increased about 15 percent to $2.2 billion due to additional costs linked to the deferral "as well as a scope change that will allow the Detroit refinery to process heavier and higher acidic crudes," Marathon added.
Marathon -- which on Tuesday posted a fourth-quarter net loss and announced cuts to total 2009 spending -- said its refining, marketing and transportation spending was expected to total $1.9 billion this year, down from $2.9 billion in 2008.
The 2009 downstream budget includes nearly $1 billion for the Garyville project and $330 million for the Detroit refinery upgrade and the rest for maintenance and other spending.
The Garyville expansion will increase that refinery's capacity to process heavy crude by 180,000 bpd.
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