Marathon Petroleum: All set to enhance Detroit refinery

Marathon Petroleum, a U.S. oil refining company operating six refineries across the United States, announced that it is about to complete the purchase of land from homeowners residing in Detroit.  The buy out forms part of Marathon’s plan to invest in oil refinery development

Apart from operating the Detroit refinery, it maintains five others located in Illinois, Ohio, Kentucky, Louisiana, and Texas.

The planned expansion would boost daily oil output capacity to 120,000 bpd.  This would mean a 14,000 bpd increase from the current 106,000 bpd, upon project completion.  Marathon’s investment in the project would reach $2.2 billion.

The company recently raised property appraisal values to $50,000 from a previous $40,000. A reappraisal of residential properties in the Detroit area is due in November.

“At this early stage, offers have been made on approximately 30 percent of the residential properties in the first phase of the program and more than a dozen purchases have been completed,” said Chris Fox, Communications Manager of Marathon.

According to news reports, a number of southwest Detroit homeowners have already signed up for the buy-out scheme.  Homeowners are reportedly taking advantage of the offer, realizing that their properties would not fetch a value higher than Marathon’s offer if they turned to selling in the open market.  Homeowners who have enlisted may later face another dilemma – how to invest or allocate their sales proceeds.

The state of Michigan will benefit from the expansion in terms of job creation and tax remittances.  More importantly, it will ensure continuous operation of the lone oil refinery in Michigan.

By Chris Termeer