Exxon Mobil Corp. (NYSE: XOM) has given final approval to an expansion that would nearly double the size of its 365,000 barrel-per-day (bbl/d) Beaumont, Texas, refinery that could make it the largest in the U.S., said two people familiar with the company's plans.
The largest U.S. oil producer has been considering a third processing unit at the plant since at least 2014.
The approval to add 250,000-350,000 bbl/d of new refining capacity authorizes financing for equipment needed to convert shale crude from Exxon Mobil's West Texas oil fields into precursors for gasoline, diesel, jet fuel and other refined products.
Exxon Mobil aims to triple its daily crude production in the Permian Basin of West Texas and New Mexico to 600,000 barrels of oil equivalent by 2025.
Last year it agreed to form a joint venture with Plains All American Pipeline LP (NYSE: PAA) that would build a pipeline able to carry 1 million bbl/d of oil to its refineries in Baytown and Beaumont.
"It has been approved," said one of the people familiar with the refinery expansion. Employees have been asked to keep the approval confidential, said the person, who could not be identified because of the restrictions.
Exxon Mobil spokeswoman Sarah Nordin said Jan. 28 she had no updates on the status of the project. In October, she had confirmed that site preparation work had begun in advance of a final decision.
Crude inventories in the Permian Basin fell to 15 million barrels (MMbbl) in the week to Feb. 19, the lowest since October and down from a record 22 MMbbl in November. That glut had doubled in size from 11 MMbbl in June, according to the Genscape data.
Qatar is preparing to issue a tender for energy firms seeking a stake in its gas expansion project, drawing interest from long-standing partners as well as newcomers.
The nearly 11 MMbbl/d of oil production in 2018 smashed the 1970 record of 9.6 MMbbl/d.