Increased refinery runs help to accommodate increases in US crude production

Increased refinery runs have helped accommodate increases in US crude oil production, according to EIA's latest Refinery Capacity Report. The US' refining capacity increased by 0.2% in 2014, reaching 18.0 million bpd.

Dakota Prairie Refining recently completed construction of one of the few new refineries built in the US over the past 30 years. The refinery, which is located in western North Dakota, has a CDU (crude distillation unit) capacity of 19 000 bpd and will refine locally produced crude oil to make diesel fuel. Earlier this year, Kinder Morgan added a 42 000 bpd condensate splitter to its Galena Park, Texas, crude oil terminal. A second unit, with similar capacity, is expected to start operating this summer.

US refinery capacity and utilisation have increased to accommodate increasing domestic crude oil production, which rose to an average 8.7 million bpd in 2014, 3.2 million bbls higher than in 2010. Gross inputs to refineries averaged a record 16.1 million bpd in 2014 compared with 15.1 million bpd in 2010. Nearly 75% of the 1.0 million bpd increase in refinery gross inputs is the result of a 4 percentage point increase in refinery utilisation compared with 2010 (from 86% to 90%). The rest of the increase is attributable to capacity expansions. Over the same period, crude imports decreased by 1.9 million bpd, and crude exports increased by 0.3 million bpd.

Capacity is expected to expand by an additional 119 000 bbls per stream day later in 2015. Delek US plans to increase CDU capacity by 10 000 bpd at its Tyler, Texas, refinery, and Marathon reported that it plans to add 35 000 bpd of condensate splitter capacity at its Catlettsburg, Kentucky, refinery by the end of the year. Further investment in refinery expansion projects will depend on expectations of relative crude oil prices and the relative economic advantage of the US refining fleet compared with refineries in the rest of the world.

Adapted from press release by Rosalie Starling

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