HOUSTON (Dow Jones)
Chevron Corp. (CVX) may expand six refineries, including its U.S. Gulf Coast refinery in Pascagoula, Miss., that it has identified as strategic assets, the head of the energy major's refining and marketing division said Tuesday.
The proposed expansions are clustered around refineries serving the U.S. Gulf Coast, and those serving the West Coast and Asian markets. Two-thirds of fuel demand growth is expected to be in the U.S. and Asia, and 75% of Chevron's refineries are in those regions, said Chevron Executive Vice President Mike Wirth.
A decision on whether to expand the Pascagoula refinery will be made in 2008, Wirth said, speaking on the sidelines of a meeting with analysts.
The possibility of adding a 200,000-barrel-a-day crude unit was discussed in 2005, but if the project goes forward, the actual expansion could take a different shape given the evolving environment of increased project costs and changing mix of fuel demand, Wirth said.
Chevron has not completed permitting, design or engineering on the project.
Chevron already has begun applying for permits to install a continuous catalytic reformer, a unit used to convert feedstocks to a blend stock for gasoline and light products, Wirth said. If Chevron gives final approval for the project, which may happen this year, and if the company receives the necessary permits, then the reformer could be operational in 2009.
Chevron also plans to upgrade its Pembroke oil refinery to process crude oil from the Caspian Sea basin. The Wales plant is well-placed to supply gasoline to the U.S. Gulf Coast.
Expansions of the company's two California refineries and a South Korean plant, as well as the construction of a new Indian refinery, will focus on serving the Asian and West Coast markets, Wirth said.
Chevron's 260,000-barrel-a-day El Segundo, Calif., refinery will be upgraded to run heavy sour crude in 2007 and have a capacity expansion in 2009, while its 240,000-barrel-a-day Richmond, Calif., refinery will be upgraded to run higher volumes of sour crude in 2008 and receive a continuous catalytic reformer in 2009.
The first phase of an upgrade at the South Korea refinery is underway, while the second phase is scheduled for 2010.
Chevron also has a 5% stake in Reliance Petroleum Ltd.'s (532743.BY) refinery being constructed in Jamnagar, India, on the same site as the Indian company's existing 660,000-barrel-a-day plant. The refinery is slated to come on line by 2009, according to materials accompanying Wirth's presentation. Chevron has the option of expanding its interest in the new refinery to 29%.
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