(TNND) — The first new U.S. oil refinery in 50 years is set to be built in South Texas with a big investment from an Indian company, according to President Donald Trump.
“America is returning to REAL ENERGY DOMINANCE!” Trump said in a Truth Social post Tuesday.
The company building the refinery, America First Refining, said it secured a capital investment and long-term commitment from a “global supermajor” to buy billions of dollars of U.S. light shale oil and the refined products from the new facility in Brownsville, Texas.
Trump called it a “historic” $300 billion deal.
America First Refining said the agreement will improve the trade imbalance between the U.S. and India.
“A new Refinery at the Port of Brownsville, will fuel U.S. Markets, strengthen our National Security, boost American Energy production, deliver Billions of Dollars in Economic impact, and will be THE CLEANEST REFINERY IN THE WORLD,” Trump said on social media.
America First Refining didn’t name the “global supermajor” that made the big investment in the new refinery, which is slated to begin construction next quarter.
But Trump announced it was India’s Reliance Industries.
America First Refining said the facility will be specifically engineered to process American light shale oil, which the U.S. has in abundance.
The refinery will have the capacity to process about 60 million barrels a year, and it’ll be built at a deep-water port that will allow it to export its products overseas.
“This project represents a historic step forward for American energy production,” said America First Refining founder John Calce in a news release. “For the first time in half a century, the United States will build a new refinery designed specifically for American shale oil. Thanks to President Trump’s leadership and the resurgence of an America First energy policy, we are creating thousands of high-quality jobs while ensuring more of our nation’s energy resources are refined here at home in the cleanest, most efficient refinery on the planet.”
University of Houston energy economist Ed Hirs said it’s good that the refinery will be geared for processing the lighter crude found in places like Texas, New Mexico, North Dakota, Colorado and Wyoming.
Shale oil makes up about 8 million barrels a day of our current production, Hirs said.
FILE – Pump jacks are seen at dawn in an oil field over the Monterey Shale formation March 24, 2014, near Lost Hills, California. (Photo by David McNew/Getty Images)
While America First Refining said this will be the first new refinery built in decades, Hirs said that ignores updates and additions to existing refineries over the years.
However, Hirs said overall refining capacity has declined in the past 15-20 years as older, smaller refineries closed due to poor economics and high refurbishment costs.
Still, Hirs said the new refinery won’t move the needle enough to make a difference for Americans pumping gas into their cars.
He said the 160,000 barrels a day the new refinery promises to produce is “real money. That’s significant. No question about it.”
“But, in a market where we burn 18 million barrels a day, that barrel coming from Brownsville is going to have to displace a barrel from someplace else,” he continued. “And maybe that’ll lead to a 5-cent-a-barrel improvement for consumers someplace.”
Hirs also said the soon-to-be-built refinery is years away from operation.
India is the main beneficiary of the new refinery, Hirs said.
India is dependent on foreign supplies of crude oil, and this deal will help feed that need, Hirs said.
Hirs also expressed skepticism that the U.S. refinery deal will boost American national security by meaningfully reducing India’s reliance on Russian oil.
“India is pretty well explaining to the world that they’ll buy from the least-cost supplier,” Hirs said.