Marathon Petroleum’s Plans for Utica Shale Oil

oil dropsMarathon Petroleum President Gary Heminger, speaking at the Hancock County Republican Party Century Club Dinner in Ohio on Thursday, predicted a great future for Utica Shale oil. He also offered some interesting insights into how much, and where, Utica Shale oil Marathon will be refining this year and next.

Production in the Utica Shale formation, in eastern Ohio, these days is 2,000 to 3,000 barrels per day, Heminger said. The amount of oil produced from some other sources is measured in tens and hundreds of thousands of barrels per day.

"It’s early in the game but we think (Utica) has great potential," Heminger said at the Hancock County Republican Party Century Club Dinner. "In the last couple of months, four or five new crude oil wells have come on stream."

Most of that crude is being purchased by Findlay-based Marathon Petroleum and refined in Canton. Marathon Petroleum refines crude into gasoline, diesel and other petroleum products.

Marathon is ready to accelerate its purchasing and refining of Utica Shale crude. At the suggestion of crude producers, it has invested in a 12,000-barrel-per-day truck unloading rack in Canton.

"We expect to increase that to 24,000 barrels per day by next summer," he said. Then, some crude will be taken to terminals in Steubenville and Wellsville, both on the Ohio River.

From there, crude will be loaded onto barges, and in a day, the crude will be at Marathon Petroleum’s Catlettsburg, Ky., refinery.

Between the Canton and Catlettsburg refineries, Marathon can handle 150,000 barrels per day, he said.

The proximity of Marathon Petroleum’s refineries, terminals and barges to the Utica Shale formation is an advantage. It enables Marathon to move the oil to market more cheaply, Heminger said.

"It all comes down to transportation," he said. "A key point for all crude oil are transportation costs."*

*Findlay (OH) Courier (May 11, 2012) – Marathon buying Ohio’s shale oil