Proposed Foreign-Trade Subzone; Chevron U.S.A. Products Company (Oil Refinery); Philadelphia, PA

DEPARTMENT OF COMMERCE

Foreign-Trade Zones Board

[Docket 20-94]

Proposed Foreign-Trade Subzone; Chevron U.S.A. Products Company

(Oil Refinery); Philadelphia, PA

An application has been submitted to the Foreign-Trade Zones Board

(the Board) by the Philadelphia Regional Port Authority, grantee of FTZ

35, requesting special-purpose subzone status for the oil refinery

complex of Chevron U.S.A. Products Company (Chevron), a wholly owned

subsidiary of Chevron Corporation, located in Philadelphia,

Pennsylvania. The application was submitted pursuant to the provisions

of the Foreign-Trade Zones Act, as amended (19 U.S.C. 81a-81u), and the

regulations of the Board (15 CFR part 400). It was formally filed on

May 11, 1993.

The refinery complex (707 acres, 1,195 employees) consists of four

sites and connecting pipelines, located near the junction of the

Delaware and Schuylkill Rivers in southwestern Philadelphia,

Pennsylvania: Site 1 (372 acres)--175,000 BPD refinery, Lanier Avenue,

east side of the Schuylkill River; Site 2 (203 acres)--Schuylkill River

Tank Farm, west side of the Schuylkill River across from the refinery;

Site 3 (116 acres)--Darby Creek Tank Farm, Falcon Hook Rd., 3 miles

northwest of the refinery; and Site 4 (16 acres)--Hog Island Wharf, 3

miles southwest of the refinery, on the Delaware River, adjacent to the

Philadelphia International Airport. The wharf, storage facilities and

pipelines operate as an integral part of the refinery. The refinery is

used to produce fuel and chemical products. Fuels produced include

gasoline, jet fuel, heavy fuel oil, diesel fuel, and light naphtha.

Chemical products produced include liquified petroleum gas and butane;

petrochemical feedstocks, such as cumene; and refinery byproducts, such

as sulfur. All of the crude oil (95 percent of inputs) and certain

blendstocks are sourced from abroad.

The application requests authority to use zone procedures primarily

for export activity at this time and indicates that Chevron will accept

approval subject to the standard oil refinery restrictions (privileged

foreign status on incoming foreign merchandise and full duties on fuel

consumed). At the outset, one of the main uses of zone procedures would

involve the refining of foreign crude oil for jet fuel that is sold for

international flights, displacing foreign-sourced jet fuel that is

imported duty- and tax-free under Customs' bonded fuel program.

Zone procedures would exempt Chevron from Customs duty payments on

the foreign products used in its exports, including jet fuel sold for

international flights. The company would be able to defer Customs

duties on finished products shipped to U.S. markets. (The duty on crude

oil ranges from 5.25 to 10.5 cents/barrel.) Jet fuel sold for

international flights also would be exempt from state sales and excise

taxes.

MTBE (methyl tertiary butyl ether) is one of the blendstocks

sourced from abroad. The company would be able to defer Customs duties

on MTBE blended into motor gasoline and shipped to U.S. markets. (The

duty on MTBE is 5.6% ad valorem). The application indicates that the

savings from zone procedures would help improve the refinery's

international competitiveness.

In accordance with the Board's regulations, a member of the FTZ

Staff has been designated examiner to investigate the application and

report to the Board.

Public comment is invited from interested parties. Submissions

(original and 3 copies) shall be addressed to the Board's Executive

Secretary at the address below. The closing period for their receipt is

July 25, 1994. Rebuttal comments in response to material submitted

during the foregoing period may be submitted during the subsequent 15-

day period August 8, 1994.

A copy of the application and accompanying exhibits will be

available for public inspection at each of the following locations:

U.S. Department of Commerce District Office, suite 201, 660 American

Avenue, King of Prussia, PA 19406.

Office of the Executive Secretary, Foreign-Trade Zones Board, room

3716, U.S. Department of Commerce, 14th & Pennsylvania Avenue, NW.,

Washington, DC 20230.

Dated: May 13, 1994.

John J. Da Ponte, Jr.,

Executive Secretary.

[FR Doc. 94-12653 Filed 5-23-94; 8:45 am]

BILLING CODE 3510-DS-P