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HOUSTON, Oct 23 (Reuters) - Motiva Enterprises LLC aims to focus on directly marketing output from itsown refineries starting in January as the joint venture of SaudiAramco and Royal Dutch Shell becomes the latest to revup its own refined products trading desk, the executive leadingthe effort said.
"When we start up, we're going to focus on supply, addingvalue to our current business" Todd Fredin, Motiva's vicepresident of supply, logistics and trading, told the ReutersCommodities Summit.
"It's an advantage to have an underlying physical systemwhen you want to be in the trading world," he said.
That system includes three refineries: the nation's largestin Port Arthur, Texas that can process more than 600,000 barrelsper day; and two more in Louisiana on track to operate as asingle 500,000 bpd plant by late 2016. Motiva also has 35terminals in 26 states, spread largely along the Texas-to-NewJersey Colonial Pipeline system.
Co-parent Shell now trades gasoline, diesel and other oilproducts on Motiva's behalf as well as its own on a contractthat runs out in December. Shell also trades crude for bothcompanies and will keep doing so as that contract lasts longer.
The current setup allows Shell to use product volumes ofboth companies. Motiva wanted more direct, real-time feedbackfrom the market through its own trading, Fredin said.
Some other refiners that once largely outsourced tradingalso have brought it in-house.
"Anytime you have it done by another service provider, itcan't be as tightly integrated," he said. "They have a muchbigger field they need to work in than just worrying about, inour example, Motiva's interest."
Motiva has hired about 40 people, mostly analysts,schedulers and others as well as six traders from within Motivaas well as its parent companies and others, he said.
The new desk will come as global diesel demand has softened,particularly in Asia, while U.S. gasoline demand is up as lowoil prices translated into cheap fuel.
Fredin said he expects "big growth" in gasoline componenttrade, such as alkylate and reformate, key ingredients forhigh-octane gasoline. Octane demand is rising as automakersbuild more higher performance vehicles to meet stronger futurefuel economy standards.
"It's the good side of the demand for gasoline," he said. (Reporting By Kristen Hays, Terry Wade, Anna Driver and LizHampton in Houston; Editing by David Gregorio)
