AP NEWS

$500 million refinery

November 22, 2016 GMT

A petroleum company announced late Monday that it is building a $500 million refinery near Laredo.

Raven Petroleum said the export-only oil refinery will target the Mexican and Caribbean oil products markets.

The Woodlands, Texas-based development company has formed alliances with Watco Companies, SGS Petroleum Service, Wink Engineering and R&R Contracting to build this new refinery and oil terminal in the Eagle Ford Shale region in Duval County, Christopher Moore, managing director of Raven, told Oil Price Information Service in an interview.

“This could be the first new oil refinery in recent U.S. history to be built,” a news release states.

“Two other companies are also aiming to build the newest oil refinery in the U.S., but their projects are in North Dakota.

The most recent ‘refinery’ additions in the U.S. were mostly condensate splitters, according to the Energy Information Administration.”

There were 141 operable petroleum refineries in the United States as of Jan.1, but the number of operating refineries was pegged at 139, according to the administration.

Raven Petroleum’s refinery project will help alleviate the current infrastructure constraints impacting the Mexican petroleum supply market, Moore said.

“Earlier this year, Mexico liberalized its oil products import market, but the import flow from the U.S. to Mexico has been limited by a lack of infrastructure.

However, some private companies in Mexico and the U.S. are planning to build cross-border pipelines, import terminals in Mexico as well as rail deliveries in the near future,” the news release states.

“Private companies’ products imports are expected to increase gradually over the next few years in line with an increase in infrastructure investment.”

The refinery and terminal project is scheduled to break ground in the third quarter of 2017. It could be in service by the end of 2018.

Raven Petroleum said it is in the process of finalizing negotiations with funding sources.

“While market fundamentals, regulations and arbitrage economics for U.S. products exports to Mexico may change over the next two years, Moore said Raven could consider building a pipeline from the Laredo area to Brownsville for oil products to the Caribbean,” the release states.

The refinery is expected to accommodate direct rail service via the Kansas City Southern-Mexico railroad and facilitate the downstream movement of petroleum products and liquefied petroleum gas to Mexico, Moore said.

The 200-acre refinery will be built on 832 acres located 7 miles outside of Hebbronville.

On the remaining 632 acres, Raven plans to include four rail loop tracks and more than 20 miles of track to accommodate 120-car unit trains as well as manifest shipments.

This site will also allow ample space for co-development and investment opportunities.

Moore said the Raven refinery would be the first and only refinery in South Texas.

The terminal is designed to unload two unit trains of crude per day and upload two unit trains of petroleum product and liquefied petroleum gas per day.

Combining its location in the Eagle Ford Shale Region and within 50 miles from the border of Mexico, the close proximity of the refinery to crude supply sources and target products market will lower the overall cost to the market, Moore said.

The refinery will process light crude from the Eagle Ford Shale and the refinery’s products slate includes diesel, jet fuel, naphtha, gasoline and LPG.

Raven has brought onboard a team of refinery operational experts, including three retired executives from Shell, ExxonMobil and Amoco, Moore said.

Raven has received support from local county officials and the Texas governor’s office regarding permitting and development of the project.

The county officials have formed a tri-county commission consisting of Judge Tano Tijerina from Webb County, Judge Ricardo Carrillo from Duval County and Judge Humberto Gonzales from Jim Hogg County to support and expedite the project’s development.