Trump Backs Plans for 168,000-bpd Texas Refinery in Brownsville
Plans for a 168,000-bpd refinery in Brownsville, Texas could mark one of the first U.S. refineries built in decades, designed to process shale crude and strengthen Gulf Coast refining capacity.
(Reuters) — U.S. President Donald Trump announced on March 10 plans for a new oil refinery to be built in Brownsville, Texas, thanking Indian energy company Reliance Industries for its role in the project.
Trump made the announcement as U.S. drivers are reacting to a spike in gasoline prices following the start of the U.S.-Israeli war with Iran, and while Republicans and Democrats gear up for midterm elections that could determine which party controls Congress through the last two years of Trump's presidency.
America First Refining said in a statement that a 168,000 barrel-per-day (bpd) refinery to be built at the port of Brownsville along the U.S.-Mexico border, when operating, would offset $300 billion in the U.S. trade deficit.
"This project represents a historic step forward for American energy production," said John V. Calce, chairman and founder of America First Refining. "For the first time in half a century, the United States will build a new refinery designed specifically for American shale oil."
Many U.S. Gulf Coast refineries are unable to process light, sweet crude oil from fracking shale fields because they were configured in the last 40 years to run lower-cost heavy, sour crude, which is higher density and contains more sulfur.
Calce praised Trump for his administration's energy policy emphasizing production of U.S. crude oil by domestic refineries.
Reliance, India's largest private sector company, identified only as a "global supermajor" in the America First statement but named by Trump in a post on Truth Social, provided a "9-figure investment" at a "10-figure valuation."
Reliance also signed "a binding 20-year offtake term sheet" with America First meaning the company will buy products the refinery produces.
America First plans to break ground in the second quarter of this year, the company said.
Industry Experts Question Need
Analysts were skeptical about the need for a new refinery on the U.S. Gulf Coast, which is already home to eight of the 10 largest U.S. refineries. Five of the largest refineries are in Texas.
"Initial announcements like this by the Trump administration have a lot of hyperbole," said John Auers, managing director of Refined Fuels Analytics.
The America First refinery would "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 in the Truth Social post announcing the project.
U.S. Gulf Coast refineries have advantages over plants in other parts of the United States, said Tom Kloza, principal analyst with Kloza Advisors LLC.
"If Brownsville is indeed the location for the build, I would assume that they are looking at an export refinery," Kloza said. “There is not much local demand and there are not pipeline connections to take Brownsville product elsewhere.”
U.S. refineries are the major supplier of motor fuels and heating oil to South America, Kloza said, and have lower costs for natural gas, hydrogen and domestic crude oil.
Auers noted Reliance's long history in refining. The company operates the 1.4-million-bpd oil refinery in Jamnagar, India, the largest on the planet.
"Let's see what develops," he said. "Reliance is a very successful company."
In addition to interests in oil refining and petrochemicals, Reliance, which reported $125 billion in revenue in 2025, operates businesses in retail, new energy, digital services, media and entertainment, according to a company website.
Beginning in late 2025, two California refineries, with a combined capacity of 284,000 bpd, have permanently shuttered production, citing California's strict regulation of fossil fuel industries.
The cost of construction of new refineries or new additions to refineries in the past decade has averaged about $40,000 a barrel of capacity, or about $6.7 billion for 168,000 barrels.
U.S. refining capacity, which was 18.4 million bpd at the end of 2024, according to the U.S. Energy Information Administration, is expected to grow through gradual increases in capacity into the 2030s, Auers said.