(Adds details on CDU overhaul, FCC operations)
By Erwin Seba
HOUSTON, June 13 (Reuters) - Marathon Petroleum Corp is considering the permanent shutdown of the smallestgasoline-producing unit at its Galveston Bay Refinery in 2016,rather than make costly upgrades to bring the unit into linewith environmental rules, sources familiar with the refinery'splans said on Friday.
Marathon is planning on shutting its 60,000 barrel per day(bpd) fluidic catalytic cracking unit 1 (FCC) because of thecost of adding a scrubber unit that would replace the currentelectrostatic precipitator.
The FCC was originally built at the refinery during WorldWar Two to boost gasoline production for the U.S. military.
While the FCC has been upgraded since the war, it still usesthe precipitator to capture a very fine powder called catalystthat may flow out of the unit and be carried into the atmospherefrom the unit's stack.
The Galveston Bay Refinery also has a 120,000 bpd FCC. Itwill continue in operation.
In 2016, the operating permit for the 60,000 bpd FCC expires. To renew it, Marathon would have to add a scrubber unitto capture the catalyst.
A scrubber mixes liquid into stack gas to capture catalyst,sulfur dioxide and nitrogen oxide before they are released intothe atmosphere.
An FCC uses a very fine powder known as catalyst to convertgasoil produced by a crude distillation unit into gasoline.Fluidic refers to the catalyst, which acts like a fluid in theunit.
Marathon officials were not immediately available forcomment.
Another refiner, Valero Energy Corp, is scheduled toshut the FCC at its 125,000 bpd Meraux, Louisiana plant in 2015as part of an agreement with environmental regulators, companyChairman Bill Klesse said in March. The Meraux refinery willrely on a hydrocracker to produce motor fuel.
BP Plc, the previous owner of the Marathon refinery,shuttered a 36,000 bpd FCC in 2006, after the refinery was idledby heavy damage from a chaotic shutdown ahead of HurricaneRita's 2005 landfall along the Texas coast. Marathon demolishedthe idled FCC last year.
CDU OVERHAUL WEIGHED
The sources also said Marathon is weighing overhauling oneof two 218,500 barrel per day (bpd) crude distillation units atits 451,000 bpd Galveston Bay plant.
Marathon has a scheduled an overhaul of the Galveston BayRefinery's 60,000 bpd Ultracracker, a hydrocracking unit, fromSeptember to mid-November, the sources said. The CDU, calledPipestill 3A, would be shut while the Ultracracker work is beingperformed.
The company is in the process of integrating the GalvestonBay Refinery, which was purchased in 2013 from BP, withMarathon's 80,000 bpd refinery located across the street.
If Marathon undertakes the overhaul of Pipestill 3A, itwould be second crude unit overhaul at the Galveston BayRefinery this year. The refinery's other CDU, called Pipestill3B, was overhauled from mid-January to mid- March of this year. (Reporting by Erwin Seba; Editing by Terry Wade and SteveOrlofsky)