Gasoline glut doesn't stop Exxon Mobil from expanding Beaumont refineryhttp://www.houstonchronicle.com/business/energy/article/Gasoline-glut-doesn-t-stop-Exxon-Mobil-from-8689398.php
July 29, 2016
A nationwide glut of gasoline sitting in storage isn't stopping Exxon Mobil Corp. from expanding its production of fuels in Texas.
Irving-based Exxon Mobil said it will again expand its Beaumont refinery as part of a $450 million investment, making it one of the nation's largest producers of gasoline and diesel. The project is focused on churning out more ultralow sulfur fuels to meet stricter federal tailpipe emissions standards going into effect next year.
Refiners are making investments to meet the new environmental regulations, said Jeff Dietert, senior research analyst for financial services firm Piper Jaffray & Co. Most, however, are upgrading, not expanding. Small refineries have until 2020 to comply, he noted.
Exxon Mobil is taking a more aggressive approach and counting on the large supplies of fuel being guzzled by the time the expansions are completed, said Will Speer, senior petroleum analyst in Houston for GasBuddy, which monitors gasoline prices and refining activity.
"They're trying to get ahead of the curve," Speer said. "Regardless of what the government regulation is, they still need to get the product out to market."
Although the U.S. is consuming record levels of gasoline now, it's not considered a growth industry here as electric cars and fuel-efficient vehicles gain market share, Speer noted. Beaumont's proximity to the Gulf Coast, however, gives the Exxon Mobil refinery an advantage in exporting more petroleum products as demand shifts to developing nations as more people buy and drive cars, he said.
Exxon Mobil said last week it will start construction later this year to add about 40,000 barrels of daily refining capacity to the Beaumont complex. The expansion is in addition to an ongoing project launched last year to add 20,000 barrels of daily capacity.
The expansions could raise the total refining capacity of the refinery to 400,000 barrels per day from 345,000 barrels, making the refinery the fourth largest in Texas and the eighth biggest in North America....
