Increasing U.S. shale oil production has benefitted many U.S. refineries, but along the Gulf Coast, the primary beneficiaries have been in Texas. As production increased in the Permian and Eagle Ford plays, new pipelines were built to supply refinery centers in Corpus Christi, Houston, and Beaumont/Port Arthur. In contrast, the availability of shale crude by pipeline to refineries in Southeast Louisiana has lagged. However, new pipeline capacity to the crude hub in St. James, LA, is about to change the dynamic in a major way. Today, we continue our series on St. James by discussing the Bayou State’s refinery infrastructure and how new pipelines could impact refinery crude slates.
This is Part 3 of our series. In Part 1, we talked about how, with the onset of the Shale Revolution, growth in Alberta oil sands production in the 2010s, and the lifting of the U.S. crude export ban in December 2015, the St. James crude hub has been in a state of flux — and the changes have only just begun. Most importantly, the hub’s long-standing role as a recipient and distributor of imported crude and Gulf of Mexico production to the Midwest has been fading, and St. James — located 60 miles upriver from New Orleans — is increasingly valued for its ability to receive and stage U.S. shale oil, Gulf of Mexico production, and Canadian oil-sands crude for delivery to area refineries and export docks. In Part 2, we looked at what St. James currently offers in terms of crude storage (about 38 MMbbl) and pipeline connectivity (inbound and outbound), as well as what expansion plans are afoot to reflect the hub’s changing function.
Canadian crude output is rising, requiring new export routes. As traditional pathways face constraints, the U.S. Rockies—especially the Guernsey, WY hub—are emerging as key corridors for moving Canadian heavy crude to downstream markets, including the Gulf Coast.
Today, we shift our attention to refineries in the greater St. James area, and how plans to add new pipeline capacity into the region may provide new crude-supply opportunities to these refineries. The refineries of Southeast Louisiana (SELA) comprise approximately 2.6 MMb/d of capacity, which equates to about 30% of the total refinery capacity along the Gulf Coast. Geographically, the SELA refineries (see Figure 1 map) span from Delek US’s Krotz Springs facility on the Atchafalaya River to Phillips 66’s Alliance refinery in Belle Chasse, downriver from New Orleans. Capacity-wise, they range from 78 Mb/d (Delek Krotz Springs) to 566 Mb/d at Marathon Petroleum Co.’s (MPC) refinery at Garyville. (See capacity table in Figure 1; refinery sizes are based on the capacity of their crude distillation units, or CDUs.)
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About the song
"Louisiana Rain" was written by Tom Petty and appears as the final track on his third studio album, Damn the Torpedoes. The LP was recorded at Sound City and Cherokee studios in Los Angeles and was produced by Jimmy Iovine and Tom Petty. Released in October 1979, the album would prove to be a big breakthrough record for Tom Petty and the Heartbreakers, eventually being certified triple-platinum by the Recording Industry Association of America. It was the first of their albums to reach a Top 10 list (#2 on the Billboard Top 200 Albums chart), and produced two hit singles: "Don't Do Me Like That” (a song from Petty’s days in his first group, Mudcrutch) made it to #10 on Billboard Hot 100 chart, and "Refugee," co-written with Mike Campbell, made it to #15.
Tom Petty was an American singer, songwriter, musician, record producer, and actor. He was the lead singer in Tom Petty and the Heartbreakers, the band he formed in 1976. He previously led the band Mudcrutch and was a co-founder of the superstar group the Traveling Wilburys. Tom Petty and the Heartbreakers made 13 studio albums, Tom Petty made three solo albums, Mudcrutch made two albums, and the Traveling Wilburys made two albums. Tom Petty and the Heartbreakers have three Grammy Awards, three MTV Video Music Awards, and one Billboard Music Award. They have a star on the Hollywood Walk of Fame and were inducted into the Rock and Roll Hall of Fame in 2001. Tom Petty passed away in October 2017.
