Marathon may cancel Texas City hydrotreater: UpdateOREANDA-NEWS. September 07, 2016. Marathon Petroleum may defer or cancel a \\$500mn hydrotreater project that could have added 65,000 b/d of finished ultra-low sulfur distillate (ULSD) at its 475,000 b/d refinery in Texas City, Texas.

The US independent refiner was considering a delay for the hydrotreater, part of a broader five-year plan for up to \\$2bn in upgrades, in favor of shipping the unfinished material to its 562,000 b/d refinery in Garyville, Louisiana, chief executive Gary Heminger said today at the Barclay's CEO Energy-Power conference in New York.

The company previously thought it could not complete other upgrades without the unit, Heminger said.

"We did not think we would be able to decouple, but now there's a very high potential that we will be able to decouple this distillate hydrotreater and save about \\$500mn," Heminger said.

Marathon laid out its South Texas Asset Repositioning (Star) project last December at its analyst day. The refiner plans to upgrade a heavy crude unit to add 40,000 b/d of capacity and improve yields and to update a resid hydrocracker to 90,000 b/d, a 20,000 b/d increase. The company also plans to integrate the refinery with its older, neighboring 80,000 b/d refinery.

The hydrotreater was described at the time as shifting 100pc of the refinery's distillates production to ULSD or ultra-low sulfur kerosene and adding 65,000 b/d of distillates production.

Canceling the unit would make it the second distillates-focused project the refiner has scrapped in as many years. Marathon Petroleum last October canceled a planned resid hydrocracker at the Garyville refinery, saying the changing market had eroded the advantages of the \\$2bn project.