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HOUSTON (Reuters) - Output at the biggest U.S. refinery could becut by more than half for up to five months after MotivaEnterprise's MOTIV.UL failed to restart a major new crudeunit at the Port Arthur, Texas, plant over the weekend, sourcesfamiliar with operations said on Monday. Just two weeks after partners Saudi Arabia and Royal Dutch Shell RDSa.L cut the ribbon on the new 325,000 barrel per daycrude distillation unit that pushed the plant's capacity to 600,000bpd, jointly owned Motiva shut the unit to fix what was thought tobe a leaking valve impairing production. After the CDU twice failed to restart over the weekend, therefinery found major issues that will take at least two months andpotentially up to five months to repair, the two sources who haveknowledge of the refinery's operations said. Motiva said that an unspecified unit had been shut down due to amechanical issue as the plant was moving toward full operations,adding an investigation was under way to understand the cause ofthe problem. "This unplanned unit shutdown is unfortunate, but we will resumenormal operations as soon as it is appropriate to do so," thecompany said in a statement released late Monday. The news pushed up cash fuel prices and lent support to gasolinefutures, traders said. It weighed on oil prices in expectationsthat other buyers in the United States -- which saw a spike inimports from Saudi Arabia this year -- would have to absorbadditional supplies the kingdom had already booked into the market. "The Saudi loadings to the U.S. had risen massively a few monthsago, as they wanted to show they could put barrels in the marketwhen requested -- and they were very vocal about it -- as well asstarting to supply Motiva," said Katherine Spector, commoditystrategist at the Canadian Imperial Bank of Commerce (CIBC) in NewYork. "The question now will be how much storage space at Motiva wasalready filled, and will they need to divert barrels to othercustomers." The entire refinery has not been shut by the outage because thepre-expansion 285,000 bpd crude distillation unit, continues tooperate. CDU units perform the initial refining of crude oil cominginto the refinery and provide feedstock for all other productionunits. While it is not unusual for new refinery units to experienceoperational teething pains when they are first commissioned, ashutdown lasting months would be a major embarrassment for Motivaand its owners after a landmark $10 billion upgrade. IMPORTS SURGE The outage may also complicate Saudi Arabia's drive to push morecrude into the market, as the Port Arthur plant was one of thebiggest new outlets for increased production. U.S. imports from the kingdom jumped to 1.45 million barrels duringthe first five months of 2012, according to Reuters calculationsbased on monthly and weekly data from the U.S. Energy InformationAdministration, the highest level for that period since 2008. Saudi Arabia pushed oil production to the highest level in decadesin May, hitting 10.10 million barrels per day on average for themonth according to a Reuters survey, helping to cushion the impactof Western sanctions against Iran's nuclear program, which havethreatened Tehran's exports. Speaking ahead of an OPEC meeting this week, Saudi Oil Minister Alial-Naimi on Monday said the producer group should increase its oiloutput target, despite a recent slide in crude prices and commentsby other members that high production had created a surplus in themarket. Gasoline prices in the Gulf Coast spot markets jumped more than 5cents on the news, while RBOB gasoline traded slightly higher even.Oil prices dropped nearly $2 per barrel. The CDU is the centerpiece of a $10 billion, five-year expansionproject that more than doubled the refinery's capacity, and theshutdown comes after the unit's official startup at a May 31ceremony attended by the chief executives of Royal Dutch Shell Plcand Saudi Aramco. SDABO.UL At the ceremony, Motiva Vice President Tom Purves, who oversaw theexpansion project, said the refinery was near its 600,000 bpdcapacity and would reach full production by the end of the secondquarter, advancing the date the refinery would reach that milestoneby a full three months. (Reporting by Erwin Seba; additional reporting by Kristen Hays,Robert Gibbons, Matthew Robinson; editing by John Wallace, BobBurgdorfer, David Gregorio and M.D. Golan). I am an expert from homedecorationsupplier.com, while we provides the quality product, such as Interior Decoration Wallpapers , China Lighted Wall Art, Wall Sticker Clock,and more.
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