By BEN LEFEBVRE
Marathon Petroleum restarted its newly expanded 120,000-bpd refinery in Detroit, finishing a
project that will increase greatly the amount of Canadian crude
oil the refinery uses, the company said
The $2.2 billion, four-year Detroit Heavy Oil Upgrade Project increased the refinery's heavy-oil processing
capacity to 100,000 bpd, five times the amount it could process
before the project.
Heavy oil is usually sold at discounts to light varieties,
which are easier to process.
"Most all of the units have been brought back online and are
producing finished products," Marathon Petroleum spokesman
Shane Pochard said.
Marathon Petroleum's Midwest refineries already have access
to the crude oil produced in the US Midcontinent area, where a
technology-driven production boom
has led to a glut at the Cushing, Okla., storage hub.
Findlay, Ohio-based Marathon Petroleum and other refiners have
greatly expanded their profit margins in recent years by
turning the discounted Midcontinent oil into fuel that then can
be sold at prices charged for fuel made by more expensive
Marathon Petroleum's refining-and-marketing unit reported
gross margin of $13.12/bbl for the third quarter, down 0.5%
from the year before.
About 7% of Marathon Petroleum's total crude output now can
come from heavy oils from Western Canada or the Gulf Coast and
should add up to $350 million/year to the company's earnings,
according to analysts at Raymond James.
"This project provides the flexibility
necessary of Marathon Petroleum to chase down the most economic
barrel," Raymond James analyst Cory Garcia said in a client
Dow Jones Newswires