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.
Stratas Advisors analyst says that the possibility of a spill has already caused the price of Mexican heavy crude to rise quickly.
The price is up as Mariner East 1 is cut off from Marcus Hook, but can it be sustained?
Customers like Poland are able to diversify their supplies of gas, challenging Gazprom’s domination of the European market.