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Proposal could make Chevron facility nation’s second-largest

Pascagoula — At Chevron Pascagoula Refinery there’s plenty of optimism that a proposed expansion will make the facility the second-largest in the United States and among the top 10 largest in the world based on crude oil capacity. That news, along with an expansion scheduled for completion in December and a possible liquefied natural gas (LNG) terminal waiting in the wings, add up to a very big year for the Jackson County refinery.

“It’s exciting,” said spokesman Steve Renfroe. “We’re very positive about the future of the area and our role here. We’re already in the middle of one project and if the others are approved, it will be big for the state.”

The facility employs 1,240 people plus some contract workers. The expansion currently underway will not require more employees but will result in the production of another 500,000 gallons of gas every day from the refinery.

The projects being considered will bring additional jobs to the refinery and revenue to the state. The liquefied natural gas facility is in the permitting phase. “It is a rigorous approval process but if approved will be good for Mississippi and will bring more gas into the area,” Renfroe said. “It means added energy that is important for the area.”

Several public meetings have been held with members of the community to address questions and concerns about the LNG terminal. Renfroe said Chevron appreciates the community’s support.

John Gass, corporate vice president responsible for Chevron’s gas business, said the company is pursuing strategies to develop its resource base through LNG and gas-to-liquids projects. On the supply side, the company signed agreements with three Japanese utilities and sanctioned the fifth LNG train at the North West Shelf Venture offshore Western Australia.

“The LNG element of our gas strategy is gaining momentum. In just the past year, we’ve made significant progress,” he said. “On the regasification side, the company secured one billion cubic feet per day of capacity at the Sabine Pass terminal and filed permits with the Federal Energy Regulatory Commission for the Casotte Landing terminal to be located near the company’s Pascagoula, Miss., refinery.”

Renfroe said Chevron is looking at the possibility of a third project, an expansion that will increase the refinery’s output of crude oil by 200,000 barrels per day. That would mean production of 530,000 barrels a day, making the facility the country’s second largest refinery.

“It’s going through an internal review right now. It’s certainly something we’re considering,” he said. “I don’t know the dollar value or the number of employees it will mean but it will be a significant project for the state.”

In a presentation to security analysts in New York, Mike Wirth, an executive vice president, explained Chevron’s plans to boost profitability in downstream operations. In outlining growth plans for the company’s refineries, he said Chevron is evaluating expanding the Pascagoula refinery and noted the second-largest U.S. refinery ranking that expansion would bring.

“We are squeezing more value out of every barrel; we are increasing flexibility and scale; we are capturing integration value; and we are leveraging technology development to improve returns,” he said.

Renfroe said he does not know when the evaluation will be complete, but company officials are looking at construction schedules because two projects will overlap. Because of increased traffic into the refinery, Chevron is interested in the four lane project that the Mississippi Department of Transportation (MDOT) has for Highway 611 that includes an overpass over U.S. 90. Highway 611 is also known as Industrial Road and leads into the Chevron plant.

“We asked MDOT to move the schedule up for that project and they agreed but do not have the funding,” he said. “We asked the Legislature for advice on how to proceed. We knew it was too late in the session. It came up in the Senate but not in the House. We appreciate their support and are looking at other options now. We’re still interested in having that highway project done sooner.”

The Pascagoula Refinery has fully recovered from Hurricane Katrina, a process that took about six weeks. During that time, gas from Europe was imported into the refinery to make sure the area had a sufficient supply. The refinery’s supply of 40 million gallons at that time and the imported 70 million gallons were distributed to a pipeline system in Collins and from there went all over the northeastern United States.

Following the storm, the refinery also worked to rebuild and restart 39 day care facilities in Jackson County, completing the project in January.

Chevron Corporation is one of the world’s leading energy companies. With more than 53,000 employees, its subsidiaries conduct business in approximately 180 countries around the world, producing and transporting crude oil and natural gas, and refining, marketing and distributing fuels and other energy products. Corporate headquarters are in San Ramon, Calif.

Contact MBJ contributing Lynn Lofton at llofton656@aol.com.

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