A Houston company will construct the largest new refinery in the last 50 years in Brownsville, Texas.
Element Fuel Holdings LLC is spending between $3 and $4 billion on the project, which will produce more than 160,000 barrels per day of gasoline, diesel, and jet fuel from shale oil production, according to a report by the Houston Business Journal.
“Since no one’s built a refinery in 50 years, there’s probably a better way to do it. Let’s optimize it,” Element Fuels founder and co-CEO John Calce told the business outlet.
The refinery will be located in the Port of Brownsville and constructed in three phases. The first construction phase includes building a naphtha hydrotreater and reformer, which is expected to be operational by 2027. Element will also build a power plant that uses hydrogen and natural gas to produce energy and include carbon capture and storage to reduce the facility’s carbon footprint.
Element Fuels told the Houston Business Journal that it intends to produce enough hydrogen to supply all the refinery’s power needs, significantly reducing the refinery’s emissions compared to older refineries that run on diesel.
The Houston-based firm said that in its second phase, it will also add a crude distillation unit and diesel hydrotreater. In its third phase, the refinery will investigate using excess hydrogen and carbon dioxide to make biofuels.
According to a report by the U.S. Energy Information Administration, refinery utilization rates are forecasted to average 90.3 percent in 2024, a significant increase from the 2020 pandemic low of 78.8 percent, offering a hopeful outlook for the industry’s growth and the prices upstream of gasoline.
Refinery activity reached 95.4 percent capacity in June, processing 17.584 million barrels per day of crude oil and other feedstocks, according to the EIA. This surge in activity has led to gasoline and other feedstock inventories growing well above figures from the same period in 2023 and 2022.
Element plans to process U.S. shale oil, which is a type of light crude that older refineries in the country are not optimized to handle. The company expects to provide 1,000 new jobs in Brownsville and grow its Houston headcount by about 80 employees.
