Louisiana Crude Oil Refinery Survey Report
Eighth Edition,
October 1996 Survey


By
Billy P. Ramagost, P.E.
Senior Energy Engineer


Refining, Alternative Energy & Power Systems Program


Technology Assessment Division
T. Michael French, P.E.
Director


Louisiana Deptartment Of Natural Resources
Jack C . Caldwell
Secretary of Natural Resources
Baton Rouge
October 30, 1996

Table Of Contents
Foreword

Discussion

Figures
1 Location Map of Louisiana Refineries

2 Operating Rates of Louisiana, Texas Gulf Coast, and all U.S. Refineries 1989-1995

3 Operating Capacity of Louisiana and U.S. Refineries 1947-1995

4 Louisiana Oil Production and Refinery Operating Capacity 1900-1995

5 Historical Refinery Input by Source 1981-1995

6 1995 Refinery Crude Oil Input Percentage by Source by Company

7 Gulf Coast Refinery Margins Regional Average Cash Operating Margin 1976- July 1996


Tables
Operating Refineries
1 Crude Capacity, Operating Rate, and Product Slate of Louisiana Refineries for 12 month period ending June 30, 1996

2 U.S. Department of Energy Capacity of Operable Louisiana Refineries as of January 1, 1995

3 U.S. Department of Energy Production Capacity of Operable Louisiana Refineries as of January 1, 1995

4 Mailing Addresses and Contacts

5 Physical Locations

6 Operating Refinery Name History


Non-Operating Refineries
7 Mailing Addresses and Contacts

8 Physical Locations, Last Known Capacity, Date Last Operated, Previous Name(s), and Present Status

9 Non-Operating Refinery Name History

Foreword

Since 1989 the Technology Assessment Division of the Louisiana Department of Natural Resources (DNR) has periodically conducted a survey of Louisiana crude oil refineries. The results of the survey are compiled into a report focusing on developments that have occurred since the previous survey. These include an overview of the general direction of the industry and updated information on the current status of refinery ownership, mailing addresses, operating status and key personnel. Tabulated statistical data, charts, and graphs relating to oil production, refinery crude oil sources, refinery margins, capacities, operating rates, and product slate are also presented. Information on both operating and non-operating refineries that are still intact is included. The previous survey was taken in October 1995, and the report was published in November 1995.

The information contained in this annual Technology Assessment Division report is designed to complement the information presented in the refinery section of the Department of Energy/Energy Information Administration (DEO/EIA) Petroleum Supply Annual usually published in late May or early June of each year for the previous calendar year. Generally, the period covered by DNR is the twelve months ending June 30, so this report is countercyclical to the DOE/EIA report.

Note :
-Annual (DOE (DOE/EIA) EIA) U. S. refinery capacity data in Table #2 and Table #3 is now being reported by EIA on a Biennial Schedule (every other year). Data reported in Table #2 and Table #3 is for January 1, 1994 and DOE's next update will be for 1996.

The operating refining capacities, operating rates, and product slate statistics presented in this report are prepared from data supplied by survey respondents. The information on the non operating refineries is obtained from their owners, trustees, and management personnel and is current within a few weeks of publication. The data used to construct the charts and graphs on oil production, refinery margins, and crude oil sources is obtained from DNR's database.

The Department of Natural Resources uses the information in the report to enhance the economic development efforts of the State by developing information on State and Federal energy policies that affect the oil and gas production and refining industries located in the State, helping crude suppliers locate refining sources and refined petroleum product buyers locate sources of supply, assisting new industries desiring to site facilities near refineries, and providing information to parties evaluating refineries for possible purchase.

See Figure 1

Discussion
Overview
With major capital expenditures to comply with environmental and safety regulations behind them, Louisiana refineries continued to focus primarily on projects to improve profitability. These included major process reconfigurations to improve efficiency or alter the product mix to include more higher value products. Since June 1995, these projects have resulted in a total crude capacity increase of almost 10,100 bcd.

Of the twenty refineries that operated during the year ending June 30, 1996, seven produced reformulated gasoline (RFG) for sale in those markets where the EPA had mandated its use effective January 1, 1995. None of these areas are in Louisiana. RFG accounted for nearly 12.6% of all gasoline production by Louisiana refineries. However, RFG production came at the expense of the other grades as total gasoline production remained virtually the same as the previous twelve month period. Some refineries have reduced or eliminated RFG production altogether because they felt the market for it was too uncertain in that the EPA had granted waivers to certain areas allowing them to "opt out" of the program.

For the twelve month period ending June 30, 1996, total Louisiana refinery operating rates decreased slightly. While there were some changes in the product mix of individual refineries, the overall mix remained about the same. The trend to less mid-grade gasoline production continued into its fifth year. Crude capacity, operating rates, and product slate for each operating refinery are shown in Table 1. Tables 2 and 3 provide additional complementary information on downstream charge and production capacity.

Note: Tables 2 and 3 are for 1994 because this data is now collected by DOE on a biennial (every other year) basis.

As of April 1, 1996, Phibro Energy has changed names and is now Basis Petroleum.

TransAmerican Refining Company is back on production but only refines on a limited basis.

Arcadia refinery at Lisbon was shut down in January 1996.

No non-operating refineries changed hands during the period from June 1995 to October 1996.

Operating Refineries
The total operating capacity of 2,524,300 barrels per calendar day (bcd) reported as of June 30, 1996, is about 4.7% higher than the 2,410,341 bed reported in our October 1995 survey. TransAmerica's refinery added 100,000 barrels to the operating capacity. The overall operating rate declined to 91.2% from 91.6%. This compares with the national rate of 93.4% for 1994. The graph of Figure 2 plots the overall operating rates of Louisiana refineries as compared to Texas Gulf Coast refineries and U.S. refineries beginning with the first DNR survey in September 1989. Figure 3 shows the trend of Louisiana and U.S. operating capacity from 1947-1995.

Through June 30, 1996, five refineries reported capacity changes, with a net increase totaling 10,100 bcd
.

A list of the refineries with increased or decreased capacity are as follows:
Company/Refinery Previous
Capacity
(bcd)
New
Capacity
(bcd)
Increase/
Decrease
(bcd)
Arcadia Ref./Lisbon 12,500 12,000 (500)
Calumet Lubr./Princeton 9,000 8,000 (1,000)
Calumet Lubr./Cotton Valley 7,800 8,900 1,100
CITGO/Lake Charles 300,000 310,000 10,000
Placid/Port Allen 47,000 47,500 500
Total Increase ...........10,100


Louisiana refineries continue to obtain most of their crude supply from outside the state as oil production within the state continues to decline. Only about 15% comes from Louisiana. This trend is depicted in the graph of Figure 4, which shows Louisiana refinery operable capacity and oil production since 1900. Of the outside sources supplying crude to Louisiana refineries, foreign countries provide the most at 58%, the OCS is next at 22%, and other states at 5%. Figure 5 shows the historical sources of crude oil for Louisiana refineries for the period 1981-1995. Generally, the smaller refineries use a greater percentage of Louisiana crude than the large refineries to satisfy their total requirements. Figure 6 shows the percentage crude source for each Louisiana refinery for 1995.

Since the beginning of the year through May, the monthly Gulf Coast Refinery Margin has been increasing. The margin was / 0.47/bbl in January and reached a maximum of / 1.73/ bbl in March and decreased to / 0.94/bbl in May. Figure 7 shows the yearly average cash margins for the period 1976-1995, and monthly for 1996 through May.

The identity and location of each of Louisiana's eighteen refineries that were operating as of November 30, 1996, are shown on the map of Figure 1. Mailing addresses and contacts are listed in Table 4. A description of the physical location of each refinery is given in Table 5. Operating Refinery Name History can be found in Table 6 and Non-Operating Refinery Name History can be found in Table 9.

Shell and Texaco Plan Joint Venture (October 7, 1996):

Shell and Texaco are proposing to form a joint venture that would combine their refining and marketing operations in the United States. The talks include Star Enterprise (Texaco's joint venture with the Saudi state owned Saudi Aramco). Future oil supplies would be guaranteed since Saudi Arabia is the world's largest oil producer.

Excess capacity and rising crude oil prices have driven profits down and refineries are looking to reverse the trend. The U.S. industry spent $10.6 billion in 1994 for refinery improvements to comply with environmental regulations. Similar amounts were spent in 1992 and 1993.

The merger would create the largest refining and marketing business in the United States. The merger would combine $17 billion of assets and bring together Shell's 8,700 outlets with Texaco / Star's 14,000 service stations in the U. S. Shell operates five refineries while Star and Texaco operate seven refineries. The companies are projected to save a billion dollars a year in cost savings.

The Federal Trade Commission of the Department of Justice will review the proposal for antitrust implications. It could be months before an agreement is signed.

Mobil and Lagoven sign a joint venture to process Venezuela Crude:
(September 17, 1996)
Mobil signed an agreement with Lagoven, a subsidiary of Venezuela's state-owned oil company, in which Lagoven will purchase a 50% interest in the Chalmette refinery. The joint interest agreement involves the production of extra-heavy crude oil in Venezuela's Orinoco Oil Belt and processing this crude in Mobil's Chalmette refinery.

The Chalmette refinery is suited to handle extra heavy crude oil from Venezuela because it has the equipment in place to process the crude oil into gasoline and distillate products. Currently the Chalmette refinery can handle 191,000 BPD of crude.

Initial production of the extra-heavy crude is scheduled to begin in 1999. The Chalmette refinery will process 50,000 BPD and increase to 100,000 BPD by the year 2002.

Other Mergers :
Phillips Petroleum and Enco were negotiating a merger in June, but talks are stalled.

Atlantic Richfield Company and Unocal Corporation wanted to expand their operations on the West Coast.

Ultramar Corporation and Diamond Shamrock Inc. have announced a merger that would create a $7.3 billion dollar company.

Gasoline Additive:
(Methylcyclopentiadienyl Manganese Tricarbonyl, MMT)
A newly approved gasoline additive, Methylcyclopentiadienyl Manganese Tricarbonyl (MMT), produced by Ethyl Corporation has been approved for sale in the U.S. MMT improves the burning efficiency and octane of gasoline. Ethyl predicts the MMT market could reach $80 million. Ethyl claims that the new additive will reduce millions of pounds of smog-related pollutants per year from the environment. The additive will reduce carbon monoxide and nitrogen oxide emissions.

The Environmental Protection Agency (EPA) considers MMT a possible health risk because it contains the metal, manganese. EPA points out that exposure to manganese dust has been found to cause neurological and respiratory damage. Ethyl claims that tailpipe emissions are low and would not pose a health hazard. MMT was approved by a federal appeals court because the federal government has no authority under the Clean Air Act to block the sale of MMT.

Ethyl has been supplying MMT to refineries. Environmental groups have contacted refineries asking that they not use the additive until there are further tests to determine if chronic, low dosages of MMT are toxic. Refineries are using caution in deciding to use MMT because of the controversy surrounding its health risks.

Automaker General Motors said that the 1997 owner's manuals will recommend that drivers not use gasoline that contains MMT in their new autos. Automakers contend that the antiknock compound could case premature spark plug wear and damage catalytic converters. Although MMT has been used in Canada for the last nineteen years, automakers are backing a bill in Canada that would ban the sale and importation of MMT. Some petroleum interests are fighting the ban claiming that it would force smaller refiners out of business from the cost of refitting and retooling necessary to produce higher octane gasoline without MMT.

Non-Operating Refineries
Arcadia Refining has two plants, one at Lisbon and the other at Dubach. The Lisbon plant operated until January, 1996 and is currently shut-in. The Dubach plant stopped taking crude as of July 1, 1993, and was reclassified by DNR as a non-operating refinery. Arcadia plans to sell both of these refineries.

Gold Line's Jennings refinery is still shut-in although it was reported last year that it might be back on production in 1996.

The TransAmerica Refinery has been moved from shut-in to active status.

The identity and location of each of Louisiana's seven non-operating refineries is shown on the map of Figure 1. Mailing addresses and contacts are listed' in Table 7. Physical locations, last known crude capacity, date last operated, and present status are described in Table 8
.

The resources of the industry continue to be redirected from projects mandated by government regulations toward more potentially profitable ventures in the private marketplace. Restructuring and redeployment of assets continues as each company strives toward maximum efficiency and profits. The industry has proved to be remarkably resilient in coping with government regulations and volatile markets the past several years and appears to be capable of overcoming new challenges as well. We will continue to follow the industry and report on new developments in the next edition of this report.

The original hardcopy of Louisiana Crude Oil Refinery Survey Report was funded 100% ($472.15) with Petroleum Violation Escrow funds as part of the State Energy Conservation Program as approved by the U.S. Department of Energy and the Department of Natural Resources.

The original public document was published at a total cost of $472.15. 300 copies of this public document were published in this first printing at a total cost of $212.46. The total cost of all printings of this document, including reprints, is $472.15. This document was published by the Department of Natural Resources, P.O. Box 94396, Baton Rouge, LA 70804-9396, to promulgate the State Energy Conservation Plan developed under authority of P.L. 94-163. This material was printed in accordance with the standards for printing by State agencies established pursuant to R.S. 43:3 1.

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