US Marathon to shut, upgrade Detroit refinery to process heavy oil

22 August 2012 20:10  [Source: ICIS news]

HOUSTON (ICIS)--US refiner Marathon Petroleum is shutting down its Detroit refinery in Michigan to complete a project that will allow it to process heavy Canadian oil, although this should not have an impact on regional retail gasoline prices, an analyst said on Wednesday.

The shut down, which will take place in early September, is part of the $2.2bn (€1.8bn) Detroit Heavy Oil Upgrade Project from 2008 and is expected to be completed by the end of this year.            

No employees will be laid off during that time, Marathon Petroleum’s communication manager Shane Pochard said. The employees will work on other maintenance projects in the refinery.

“The refinery will then undertake an approximately 70-day turnaround (along with a number of maintenance activities) in order to tie-in the new equipment with the existing refinery,” Pochard said. “Employment will not be negatively affected during turnaround activities.”

The 106,000 bbl/day Detroit refinery is the only one in Michigan. The shut down could cause a tightness of regional gasoline supplies, but Pochard said gas stations and other businesses have been informed in order to make other arrangements for supplies.

Furthermore, one industry analyst said he thinks the timing of the shut down is key to offsetting potentially higher regional gasoline prices.

According to Patrick DeHaan of, since this is a planned closure when demand is already predicted to be weak, it may only have a slight effect, if any, on regional gasoline prices.

“In fact, any impact will be negated with the switch-over back to cheaper winter gasoline,” DeHaan said.

Refineries will switch to process the cheaper winter blends, which are at a higher Reid Vapor Pressure (RVP) point, in mid-September.

The current national average for regular gasoline is at $3.716/gal (€0.785/litre), up from the same time period one year prior, which was at $3.569/gal, according to US automobile organisation AAA.            

($1 = €0.80)

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By: Anna Matherne

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