Just a couple weeks ago, executives of Shell and Saudi Aramco, the national oil company of Saudi Arabia, joined together to share the successful construction of their $10 billion expansion project that had been in the works since 2006.
While the executives celebrating, the refinery wouldn't play along. Today, the expansion project sits idle, victim of a malfunction that is costing Motiva (the name of the joint company) nearly $1 million per day in lost revenue. The problem for Motiva is that the massive expansion is having massive problems and it may remain down for months as the kinks are worked out.
The refinery issue comes at the peak of U.S driving season, a time when most refineries are operating near their capacity. After such expansions, a very slow startup time is normal as a refinery slowly ramps up production, but the larger the facility, the more complex and higher degree of difficulty ramping up production.
Combined with other refinery issues in the region, wholesale gasoline costs in the Mid-Continent are the highest in the nation, clearly not helped with the shutdown of this massive newly finished refinery expansion.
Sources say that Motiva's newly installed CDU (crude distillation unit), a device that separates incoming oil into streams to make separate types of fuel had caught fire as fuel production was ramping up at the refinery. Repair crews later found corrosion, a person familiar with the refinery's operations said, adding that it could take months to repair the unit, one of two at the refinery.
Motiva is investigating the cause and extent of the mechanical issues, according to spokeswoman Emily Oberton, who said "we will resume normal operations as soon as it is appropriate to do so."