Western Refining plans to boost crude throughputs and alkylate production next year at its 131,000 b/d refinery in El Paso, Texas.
The third quarter 2017 project will add 3,500 b/d of crude processing capacity and 1,000 b/d of alkylate, a high-octane blendstock the refiner uses to produce gasoline for the Phoenix, Arizona, market. Upgrades will take place during a planned turnaround.
Western has discussed expanding crude processing at the El Paso refinery for at least two years as oil production in the nearby Delaware basin gave the site an advantage on crude costs. The company must balance increased production against the comparatively limited opportunity to sell products.
Arizona closely follows the Los Angeles market, which was balanced so long as all southern California refineries were running, chief executive Jeff Stevens said.
But Western frequently found profitable opportunities when a refinery tripped offline, such as when power outages downed PBF Energy's 155,000 b/d refinery in Torrance, California, in September and October. And the refiner had increased exports out of El Paso into Mexico, which the company can reach by pipeline connection.
"We're exporting more diesel today than we ever have," Stevens said. "We believe this is a modest increase in barrels in between our five or six primary markets. We don't see any issue in moving those barrels and actually moving them at a good netback."
