Motiva plans hydrocracker expansion at Texas refinery-document

(Adds quotes, details on project)

By Kristen Hays

HOUSTON, Sept 19 (Reuters) - Motiva Enterprises is planning to expand a hydrocracker and diesel hydrotreater unit at its sprawling refinery in Port Arthur, Texas, according to a permit application seen Friday by Reuters, as global demand for the fuel rises.

The application filed with Environmental Protection Agency's Region 6, which oversees Texas and surrounding states, said the project at the largest U.S. refinery will increase diesel fuel output and push the unit's design capacity to 105,000 barrels per day from its current 82,000 bpd.

The company, a joint venture of Royal Dutch Shell (LSE: RDSA.L - news) and Saudi Aramco, wants to start construction in April 2015.

The hydrocracker was one of several new process units added to the refinery as part of a $10 billion expansion that more than doubled the plant's capacity, the permit application said. The expansion cost was not disclosed.

Other U.S. Gulf Coast refiners have also done or are planning to undertake projects to ramp up diesel fuel output to capitalize on growth in global diesel demand.

The boom in cheap U.S. and Canadian crude production has prompted refiners in the region to maintain high refinery rates - 90 percent or more - as they increasingly export what is not needed domestically.

Valero Energy Corp has added hydrocrackers to two Gulf Coast plants, and Marathon Petroleum Corp plans to expand or revamp hydrocrackers at three refineries this year and in 2015.

Motiva's Port Arthur plant wants to do the same with its project.

"This is a very important project to the economic viability of our facility," the company said in the application.

The hydrocracker targeted for expansion is the only one at the refinery that produces fuels. It converts gasoil into fuel gas, naphtha and diesel fuel. Its integrated diesel hydrotreating section processes diesel feedstocks.

Another hydrocracker at the plant processes lube oils and is not part of the proposed project.

The expansion will involve changes to piping, pumps, exchangers, compressors and other emission sources.

"The overall operation of the unit will not be changed by this project other than an increase to its capacity," the application said. (Additional reporting by Erwin Seba in Houston, editing by G Crosse)