Coker

Fresh on the heels of expanding its Beaumont, TX, refinery into the largest in the country, ExxonMobil announced in January that it had finished yet another project at its century-old Baton Rouge complex in Louisiana. The Baton Rouge Refinery Integrated Competitiveness (BRRIC) project took roughly three years to complete and did not add crude refining capacity, unlike the Beaumont project. Instead, the goal of the $240 million investment was to modernize the crude oil processing plant — the state’s largest — increasing access to competitive crudes and growing markets for its fuels as well as curbing the refinery’s environmental impact. In today’s RBN blog, we take a closer look at the BRRIC project and what it means for the Baton Rouge refinery. 

Western Canadian heavy crude producers are getting desperate to find markets for oil sands production expected to increase by 1 MMb/d over the next 3 years. Few Canadian refineries can process these heavy bitumen crudes and domestic Canadian conventional crude production exceeds local refining capacity. Of all the current market alternatives, the US Gulf Coast is the most logical. Transporting heavy crude to that market continues to be constrained by a lack of infrastructure. Oversupply into the Midwest market and continued uncertainty about infrastructure have created a volatile price environment. Today we begin a two-part analysis of the Gulf Coast market for heavy Canadian crude.