HOUSTON, Dec 17 (Reuters) - Motiva Enterprises has withdrawn its permit request to expand a hydrocracker and diesel hydrotreater unit at its Texas refinery, the largest in the United States.
In a brief letter received by the U.S. Environmental Protection Agency earlier this month, Motiva asked, without explanation, to withdraw its August permit application for the project at the company's 600,250 barrels per day refinery. The company had sought to start construction in April 2015.
Royal Dutch Shell, which operates the refinery it jointly owns with Saudi Aramco, declined to explain Motiva's about-face or say whether the project remains under consideration.
The withdrawal came after global oil prices have fallen nearly 50 percent since June.
"Motiva routinely adjusts our business plans, based on company needs and evolving state and federal regulatory requirements at any given time," a company spokesman said.
The permit application submitted in August said the project would increase diesel fuel output and push the unit's design capacity to 105,000 barrels per day from its current 82,000 bpd as U.S. diesel exports have grown sharply.
The U.S. Energy Information Administration said total distillate exports last week reached 1.14 million bpd, up nearly 30 percent from the same week in 2010.
The hydrocracker was one of several new process units added to Motiva's Port Arthur refinery as part of a $10 billion expansion that more than doubled the plant's capacity, surpassing Exxon Mobil Corp's 560,500 bpd Baytown, Texas, refinery as the largest in the U.S.
The unit that had been targeted for expansion converts gasoil into fuel gas, naphtha and diesel. The integrated diesel hydrotreating section processes diesel feedstocks.
Other U.S. Gulf Coast refiners have increased diesel output in response to growing export demand. Valero Energy Corp , the largest U.S. refiner, has added hydrocrackers at two Gulf Coast plants and Marathon Petroleum Corp is expanding or revamping hydrocrackers at three refineries. (Reporting By Kristen Hays; Editing by Terry Wade and Andrew Hay)