Increase in Production Equivalent to the Diesel Produced from Four Average-Size Refineries
December 31, 2008 - ExxonMobil is increasing diesel-production capacity in the United States and Europe by about 6 million gallons a day, an increase in production equivalent to the diesel produced from four average-size refineries.
For automobiles, light pickup trucks, mopeds and lawn mowers, gasoline remains the predominant fuel in many countries, especially in the United States. Yet in Europe, diesel is becoming the fuel of choice for automobiles, and worldwide it is relied upon to run everything from tractor-trailers, buses and marine vessels to off-road equipment such as backhoes, threshers and locomotives – even electrical power generators in many developing countries.
While motor gasoline has a higher global transportation demand, diesel fuel leads in projected demand growth.
ExxonMobil engineers are busy preparing to keep pace with this rising trend. In December, the company announced projects totaling more than $1 billion to increase production of diesel fuel by approximately 6 million gallons (about 143,000 barrels) a day at three refineries – Baytown (Texas), Baton Rouge (Louisiana) and Antwerp (Belgium). When completed in 2010, these major expansions will boost ExxonMobil’s low-sulfur diesel-production capacity by more than 35 percent at the U.S. sites and by more than 100 percent at the European site.
This is equivalent to the diesel production from four average-size refineries.
“People sometimes ask why we aren’t building new refineries to produce more fuel,” says Brian Lawless, manager of global project development, ExxonMobil Refining & Supply. “Why build new refineries when we can more efficiently and more quickly expand the ones we already have? Look-ing at it another way, if you have a growing family and need a bigger house, does it make more sense to keep the house and build another, or add on to the one you now have?”
Global growth for diesel
According to the International Energy Agency (IEA), the market for diesel fuel is growing about 3 percent a year in developed countries. Growth in developing countries is expected to be even higher.
“Diesel demand grows with GDP [gross domestic product] and the demand for more goods and services,” says Steve Hart, vice president, planning and projects, ExxonMobil Refining & Supply. “Diesel meets close to
90 percent of the commercial trucking needs in the United States and Europe.”
In Europe, the increased penetration of diesel engines in light-duty vehicles is putting pressure on diesel production. According to the European Automobile Manufacturers’ Association, one of every two new passenger cars is a diesel. This ratio may increase in the future.
“In fact, Europe’s demand for all diesel fuels for all uses is more than double the demand for gasoline,” says Baudouin Kelecom, fuels executive for Europe, Africa and the Middle East. “This high demand creates a significant fuel-supply challenge; accordingly imports are an important part of Europe’s diesel supply today.”
Full use of existing facilities
Implementation of ExxonMobil’s latest diesel-capacity expansions began this fall at the company’s two largest refineries in the United States – Baytown and Baton Rouge. Construction of new diesel facilities is also beginning at the Antwerp Refinery in Belgium, the company’s second largest in Europe. Chosen for its size, central location and optimal supply logistics, Antwerp will be in position to increase supplies to markets across Europe.
To raise production of highway diesel in 2006, ExxonMobil installed new facilities and debottlenecked operations at four U.S. refineries, including Baytown and Baton Rouge. However, the current projects to produce nonroad diesel are a far larger undertaking.
“Previously, we were able to create enough capacity to make diesel just by making modifications to existing facilities at our refineries,” says John Medley, fuels issues advisor. “ExxonMobil is now responding by building completely new units at its refineries in Baytown, Baton Rouge and Antwerp to make low-sulfur diesel using state-of-the-art technology.”
“Existing refineries already have the utilities and support facilities in place, operated and maintained by skilled and well-qualified personnel,” says Lawless. “Expanding a refinery already in operation requires a fraction of the cost of building a new facility, and taking advantage of existing refinery infrastructure is clearly the most efficient way to add that capacity.”
When the latest diesel expansions begin production in 2010, ExxonMobil will supply markets that will already be hungrier for diesel than they are today.
“And we’ll continue to look for additional opportunities to grow the diesel business,” says Hart, “and meet future needs of the marketplace.”
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