Marathon Oil Corporation announced its board of directors has approved an estimated $3.2 billion project that will expand the crude oil refining capacity of the Company's Garyville, La., refinery by 180,000 barrels per day (bpd).

This will increase Garyville's refining capacity from 245,000 bpd to 425,000 bpd and Marathon's total refining capacity from 974,000 bpd to 1,154,000 bpd. The expansion is subject to obtaining necessary permits from applicable regulatory agencies.

"The Garyville expansion is an example of Marathon's commitment to making superior investment decisions for our shareholders while building energy infrastructure that will supply the growing needs of consumers in the markets we serve," said Clarence P. Cazalot, Jr., Marathon president and CEO. "This project will build on Garyville's best-in-class ranking by utilizing shared infrastructure and capturing synergies between the existing facilities and those that are part of this expansion." Completed in 1976, the Garyville refinery is the last grassroots refinery constructed in the U.S. and has consistently been ranked as one of the most efficient refineries in the nation.

In addition to the installation of a new crude and vacuum distillation unit, expansion plans call for the construction of infrastructure and other process units with the following design capacities: a 44,000 bpd delayed coker, a 70,000 bpd heavy gas oil hydrocracker, a 65,000 bpd reformer and a 47,000 bpd kerosene hydrotreater. These new facilities will incorporate the latest safety and environmental control technologies at the refinery, which is the first and only refinery to be included in the U.S. EPA's elite National Environmental Performance Track (NEPT). Marathon's Garyville refinery was also one of the first refineries to achieve OSHA's Voluntary Protection Program (VPP) Star designation.

"The Garyville expansion project will help our country meet its growing energy needs by providing an additional 7.5 million gallons of clean transportation fuels to the market each day, while also benefiting the Louisiana economy at a critical time," said Gary R. Heminger, executive vice president of Marathon and president of the Company's refining, marketing and transportation operations. "As with all Marathon operations, our first priority is operating safely and in an environmentally sound manner. We also are committed to keeping all interested parties informed and updated as we move forward with this important project."

In addition to adding substantial supply to the nation's marketplace, Marathon's Garyville expansion investment will also provide significant benefits to St. John the Baptist Parish and Louisiana. It is anticipated that the completed expansion will add approximately 180 to 200 new full-time employees and 50-70 new full-time contract employees. The construction phase will require an average of 2,000 workers, with up to 4,000 workers at peak periods.

St. John the Baptist Parish will receive between $40-50 million in sales and use taxes during the project construction. In addition, an economic impact study performed by Dr. James A. Richardson, alumni professor of economics at Louisiana State University, indicates that millions of dollars in taxes will accrue to both the state and the parish from economic activity associated with the project and overall expansion of the refinery operations.

Marathon recently completed the front-end engineering and design (FEED) cost estimation phase of the project and permitting is underway with the Louisiana Department of Environmental Quality (LDEQ). Upon final permit approval, construction is expected to begin in mid-2007 with startup planned for the fourth quarter of 2009.