In a recent earnings call, Marathon Petroleum announced that the catalytic reformer at its Galveston Bay refinery in Texas may remain out of service for the entire third quarter. The unit was knocked out of operation on May 15 due to a fatal fire.
The shutdown of the catalytic reformer significantly impacted the refinery’s crude throughput, causing a reduction of approximately 2.5 million barrels in the second quarter.
Despite the offline unit and planned maintenance at its Mid-Continent and West Coast facilities during the second quarter, Marathon reported a refinery utilization rate of approximately 93%. The total throughput for the period reached 2.9 million barrels per day, down from last year’s 3.069 million barrels per day when the utilization rate stood at 100%.
Although Marathon Petroleum did not provide a specific timeline for the reformer’s return to service, the company indicated that it is likely to remain offline throughout the current quarter.
On a positive note, Marathon revealed the successful completion of the South Texas Asset Repositioning project at the Galveston Bay refinery. This project is expected to increase crude capacity by 40,000 barrels per day and boost resid processing capacity by 17,000 barrels per day.
Construction Progresses on Renewable Fuels Conversion Project
Marathon is making significant progress on its renewable fuels conversion project at the Martinez site in Northern California. The company expects the pretreatment capabilities to become operational in the second half of 2023. This development marks a significant step towards the facility’s goal of producing over 17 million barrels of renewable fuels annually by the end of the year.
Second Quarter Refining and Marketing Margins
During the second quarter, Marathon reported an average refining and marketing margin of $22.10 per barrel, down from $37.54 per barrel in the same period last year. Refining operating costs were $5.15 per barrel for the quarter, slightly lower than the $5.19 per barrel recorded a year ago.
The decline in margins impacted the company’s overall profitability for the quarter, with Marathon reporting a net income of $2.2 billion, compared to $5.9 billion in the corresponding period of the previous year.
Third Quarter Forecast
Marathon’s third-quarter forecast indicates refinery throughputs totaling 2.930 million barrels per day, with a utilization rate of 94%.
Reporting by Steve Cronin; Editing by Jeff Barber