Marathon Petroleum Cancels Louisiana Refinery Upgrade

U.S. refiner Marathon Petroleum Corp said it would cancel a planned expansion project at its 522,000-barrel-per-day Garyville, Louisiana refinery.

The company had said in February that it would defer the final investment decision on the project to convert residual fuel to diesel using hydrogen.

The decision to scrap the residual oil upgrader (ROUX) is expected to cost Marathon Petroleum up to $2.5 billion and comes amid a slump in global crude oil prices.

"While we still believe the ROUX is an excellent project to enhance MPC's platform, we constantly evaluate market conditions, and at this time we have decided to cancel the project," Chief Executive Gary Heminger said in a statement announcing third-quarter results.

Excluding an impairment charge related to the cancellation of the project and other items, Marathon posted a profit of $1.94 per share in the quarter.

That beat the average analyst estimate of $1.82 per share, according to Thomson Reuters I/B/E/S.

Net profit attributable to the company rose more than 40 percent to $948 million, helped by strong demand for refined products and low crude costs.

Reporting by Swetha Gopinath