MOSCOW (MRC) -- Exxon Mobil Corp in coming days will sharply boost gasoline and diesel production at its Beaumont, Texas, refinery, people familiar with the matter said, completing a USD1.2 B expansion first considered nine years ago, said Reuters.
Initial startup of a 250,000 bpd crude distillation unit (CDU) at the 369,000 bpd refinery is expected by Jan. 31, the sources said, making the Beaumont refinery the second largest in the United States.
It is the first major expansion to U.S. oil processing in nearly a decade, adding the equivalent of a mid-sized refinery, and coming online as scheduled at a time when U.S. President Joe Biden has been urging refiners to produce more fuels, or face penalties.
U.S. stockpiles of diesel and gasoline are near five-year lows, and profit margins for producing motor fuels in the U.S. Gulf Coast region are near record levels.
Refiners are earning about USD35.40 per barrel using the industry's crack spread, a profit measure which compares the cost of crude oil to sale prices for gasoline and diesel, according to Refinitiv.
"Right now, margins are sensational," said Garfield Miller, president of refining investment banker Aegis Energy Advisers Corp. "These margins tell you that as far as the U.S. Gulf Coast is concerned, there is plenty of demand relative to supply."
As per MRC, ExxonMobil has initiated legal proceedings against the European Union to try to stop a proposed windfall tax on fossil fuel companies, arguing Brussels has exceeded its legal authority. In September, European Commission President Ursula von der Leyen announced the plan to impose a 33% “solidarity contribution” after oil and gas companies posted record profits in 2022.