Port Arthur Refinery Expansion Delayed

Motiva Enterprises is delaying completion of a $7 billion expansion of its Port Arthur, Texas, refinery, according to the Houston Chronicle. Completion was originally scheduled by late 2010, but the company said it will now be delayed until the first quarter of 2012.

Other U.S. refiners such as Valero Energy, Marathon Oil and ConocoPhillips are also reining in expansion plans in the face of falling demand, an ailing economy and government policies that encourage alternative energy sources, the newspaper said.

Rising fuel prices prior to the economic slowdown lead to a spurt in new fuel refining and expansion projects globally, including in the U.S. These projects propelled a boom in the transport of project-related cargo. Now, over-capacity may be looming.

According to the American Petroleum Institute, overall oil-product demand fell 3 percent in February as compared to a year ago, the lowest February demand since 1999. Although gasoline demand was up two percent, diesel fell 12 percent and jet fuel fell 6.6 percent. Refinery inputs fell 2.9 percent during the month.