December 03, 2020

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Marathon Petroleum idles 2 refineries, as Total sells Lindsey refinery

Marathon Petroleum idles 2 refineries, as Total sells Lindsey refinery
Photo courtesy of Marathon Petroleum

Petroleum product demand destruction due to the Covid-19 pandemic has caused Marathon Petroleum Corp., the largest U.S. refiner, to indefinitely idle its Martinez and Gallup refineries, with no plans to restart normal operations. As part of these changes, Martinez will be converted to a terminal facility.

“We are also evaluating the strategic repositioning of Martinez to a renewable diesel facility, which aligns with California’s Low Carbon Fuel Standards objectives and MPC’s greenhouse gas reduction targets, the company said.

The Martinez refinery, with approximately 740 employees, is located in Martinez, California, and has a crude oil capacity of 161,000 barrels per calendar day (bpcd).

Using crude oils from California and other domestic and foreign sources, the refinery produces cleaner-burning California Air Resources Board (CARB) gasoline and CARB diesel fuel, as well as conventional gasoline, distillates, petroleum coke, propane, heavy fuel oil and refinery-grade propylene. Products are distributed via truck, rail, pipeline and ship.

The Gallup refinery, with approximately 220 employees, is located near Gallup, New Mexico, and is the only active refinery in the Four Corners area. The crude oil capacity of the refinery is approximately 26,000 barrels per calendar day (bpcd).

The Gallup refinery primarily processes high-quality crude known as Four Corners Sweet into gasoline, distillate, heavy fuel oil and propane. Products from the refinery are distributed via transport truck and rail.

“Indefinite idling unfortunately means most jobs at these refineries will no longer be necessary, and we expect to begin a phased reduction of staffing levels in October. We do not anticipate supply disruptions in these regions, and we will continue to utilize our integrated system to meet customer commitments.”

Meanwhile, in Europe, French energy major Total announced on July 27 that it has agreed to sell the Lindsey refinery and its associated logistic assets, as well as all of the related rights and obligations, to the Prax Group.

Located in Immingham, Lincolnshire, in England, the Lindsey refinery has an annual production capacity of 5.4 million tons. This acquisition will make Prax – an independent British group specialising in the trade and sale of oil products and in possession of a growing network of 150 service stations and numerous supply chain assets – more integrated and competitive in the United Kingdom and will secure its local supply.

“This transaction is in line with our forward-looking strategy for Total’s European refining base, which involves focusing our investments on integrated refining and petrochemical platforms. Since the sale of our British retail network in 2011, the Lindsey refinery hasn’t been part of Total’s downstream system, it will be put to better use within the Prax Group; an independent player with a growing UK network. After considering several options for the future of the Lindsey site, Total chose the one that best protects local jobs,” said Bernard Pinatel, president of Total Refining & Chemicals.

The sale should be finalized by the end of the year, once the conditions of the sale have been satisfied.

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