PORT ARTHUR REFINERY HISTORY

The Port Arthur Refinery was a direct by-product of the January 10, 1901, Lucas gusher and the resulting Spindletop oil boom at Beaumont. Storage tanks and a pump station were constructed at Garrison station near Spindletop with a pipeline completed in August 1902 to the present refinery site, which was on open prairie next to an old brickyard. The first product sold by The Texas Company (Texaco) in 1902 was Spindletop crude oil pumped from tanks at the refinery site to a barge at Port Arthur Terminal. Construction of the refinery began in December 1902. The first batch tar stills were fired up in April 1903. However, the refinery officially started with the first run on the new crude stills on November 13, 1903.

With the rapid decline in Spindletop production in late 1902 after the great September fire, the crude supply for the new refinery and the hopes of the fledgling company was in jeopardy. The Texas Company bet nearly their entire source of capital on a oil gusher that secretly blew in during a heavy rain storm at Sour Lake on the night of January 8, 1903. The discovery saved the company from early extinction. During the nearly three months it took the company to secure the rights to the secret oil field, they quickly sold contracts for crude oil at 60 cents a barrel. When the discovery was announced, crude prices dropped to 10 cents allowing the company to buy cheap oil to cover the contracts and pocket a nice profit to help fund its plans to construct a refinery at Port Arthur.

Over 200 companies sprang up from the Spindletop oil boom, but only a few were still in business 50 years later. Familiar local companies born of Spindletop black gold were the Gulf Oil Corp. (Chevron), Humble Oil & Refining Co. (later Exxon, then Exxon-Mobil), Sun Oil Co., and The Texas Company, with the latter being the last survivor. The Texas Company was renamed Texaco, Inc. in 1959. From modest beginnings in 1902 as The Texas Fuel Co., subsequent reorganization as The Texas Co., and the construction of its first refinery at Port Arthur, an international major oil company was born.

TIMELINE:

1901 Spindletop oil discovery
1903 Port Arthur Refinery begins operation as Texaco’s first refinery
1906 Port Neches Asphalt refinery was returned to asphalt production
1909 Grease and lube oil processing was added as well as a canning plant
1920’s HMVS batteries constructed for gasoline and higher yields
1930’s Packaging and shipping facilities were expanded
1940’s and 1950’s Expansion of gasoline and lube processing facilities
1960’s Crude and cracking capacity expanded
1970’s Crude capacity increased
1980’s Crude capacity reached over 400 MBPD
mid-1980’s Refinery was streamlined and crude running reduced dramatically
1989 Star Enterprise was formed between TRMI and SRI
1990’s Numerous environmental programs were put into affect
1998 Motiva Enterprises was formed by Texaco, Shell, and SRI and a new state-of-the-art lube processing unit was brought on-stream
2002 Motiva Enterprises became equally owned by Shell and SRI
early 2003 New low sulfur gasoline unit was started

In the first decade, the refinery added facilities to produce asphalt, grease, and lube oil. Metal cans were made at the Port Arthur Terminal (The Island) and filled with lube oil and grease manufactured at the refinery. Wooden boxes were made to safely transport cans filled with oil products and shipped to all parts of the world. Markets were quickly developed in the Far East, Europe, Middle East, and Africa. The growing demand brought a large expansion of the refinery.

The growing gasoline demand during the 1920’s was supplied by the Holmes-Manley cracking process developed at Port Arthur Refinery by the Refining Manager and General Superintendent. A total of 72 HMVS batteries were constructed from 1919 to 1927. The refinery became a first class lube oil refinery in the late 1930’s and 1940’s with the addition of furfural refining and solvent dewaxing. Gasoline for the war effort and after World War II brought another great expansion. New fluidized catalytic cracking units (FCCU) and alkylation units were constructed followed in the 1950’s by three reforming units to product 100 octane gasoline. The refinery employed over 5000 people. In the 1970’s crude capacity was increased to 405 MBPD.

With product demand nearly flat during the 1970’s and 1980’s, the growth in the oil industry resulted in an oversupply with the resultant narrowing of margins. A tremendous rationalization of the oil industry took place in the mid-1980’s. Management seriously considered closing Port Arthur Refinery. The President of Texaco, Jim Kinnear, thought the refinery could be saved and he gave plant manager Lee Townsend a chance to turn things around. Many old units were shut down and employees laid off in an effort to streamline the refinery and return it to profitability. That time was difficult, but it did eventually provide a stable work environment for the remaining employees.

On January 1, 1989, Saudi Refining, Inc. purchased 50% of Port Arthur refinery as part of a joint venture with Texaco known as Star Enterprise. It included two other Texaco refineries in Convent, Louisiana and Delaware City, Delaware and all of Texaco's marketing in the southeastern U. S. On July 1, 1998, a joint venture was formed between Star Enterprise and Shell Oil Co. under the name Motiva Enterprises LLC. In 2001, Texaco was purchased by Chevron and its interest in Motiva was sold to Shell on February 13, 2002. Port Arthur Refinery is still operated as Motiva, which is now jointly owned by Shell and Saudi Refining.

Port Arthur Refinery has made great strides in the past two years to dramatically improve operational performance, environmental stewardship, employee safety, and refinery profitability. Motiva’s Port Arthur Refinery will continue to improve its standing as one of the preeminent Gulf Coast refineries well into the 21st century.

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