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Released July 30, 2021 | SUGAR LAND
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Researched by Industrial Info Resources (Sugar Land, Texas)--While existing refining margins aren't as good as the company would wish for, Valero Energy Corporation (NYSE:VLO) (San Antonio, Texas) had a reasonably successful second-quarter 2021 as a recovery in transportation fuels appeared and the company's renewable diesel sales and ethanol production increased.
In this week's second-quarter earnings conference call with analysts, Chief Executive Officer Joe Gorder said, "There was a significant increase in mobility in the second quarter, driving higher demand for refined products, particularly in the U.S. In fact, we're seeing demand for gasoline and diesel in excess of pre-pandemic levels in our U.S. Gulf Coast and Mid-Continent regions." As gasoline demand increases, so does ethanol blending, and Valero's ethanol production volumes in second-quarter 2021 averaged 4.2 million gallons per day, which was 1.9 million gallons per day higher than the prior-year quarter. Gorder said jet fuel demand continues to ramp up as well and is about 80% of 2019's level.
Gorder also said product exports have been picking up, particularly to Latin America, with the easing of lockdowns in the region. Valero exported 410,000 barrels per day (BBL/d) of products from its system in June, representing the highest volume since 2018.
To cater to this increasing demand, Valero increased refinery throughput to an average of 2.8 million BBL/d in second-quarter 2021, which was 514,000 BBL/d higher than the same quarter of 2020. Throughput capacity utilization was 90%.
Gorder discussed the company's ongoing projects in its refining and renewable diesel segments. "Our Diamond Green Diesel (DGD) ... project at Saint Charles [Louisiana] remains on budget and is scheduled to be operational in the middle of the fourth quarter of this year," he said. This expansion project will increase Valero's renewable diesel production capacity by 400 million gallons per year, bringing the total capacity at Saint Charles to 690 million gallons per year of renewable diesel. The project kicked off in 2019. Subscribers to Industrial Info's Global Market Intelligence (GMI) Alternative Fuels Database can click here for the project report.
The company is building a brownfield renewable diesel plant at its refinery in Port Arthur, Texas. Gorder said, "Our Diamond Green Diesel 3 project at Port Arthur is also progressing well and is now expected to be operational in the first half of 2023. With the completion of this 470 million-gallons-per-year plant, DGD's total annual capacity is expected to be 1.2 billion gallons of renewable diesel." Subscribers can click here for the project report.
Valero's renewable diesel sales volumes averaged 923,000 gallons per day in the just-passed quarter, which was 128,000 gallons per day higher than second-quarter 2020.
Optimization projects in Valero's traditional Refining sector remain on track. Among these is the addition of delayed coker unit at its Port Arthur Refinery, construction of which kicked off in 2019. The 55,000-BBL/d delayed coker will produce additional vacuum gas oil to supply both the refinery's hydrocrackers. Aspects of the project were delayed by COVID-19, and it is expected to be completed in 2023. Subscribers to Industrial Info's Refining Database can click here for the project report.
Valero expects capital investments this year of approximately $2 billion. About 60% of this will be allocated to sustaining the business and 40% to growth. More than half of this growth capital has been allocated to expanding the company's renewable diesel business.
Valero reported adjusted second-quarter 2021 net income of $197 million, compared with an adjusted net loss of $504 million in the second quarter of 2020.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn.
In this week's second-quarter earnings conference call with analysts, Chief Executive Officer Joe Gorder said, "There was a significant increase in mobility in the second quarter, driving higher demand for refined products, particularly in the U.S. In fact, we're seeing demand for gasoline and diesel in excess of pre-pandemic levels in our U.S. Gulf Coast and Mid-Continent regions." As gasoline demand increases, so does ethanol blending, and Valero's ethanol production volumes in second-quarter 2021 averaged 4.2 million gallons per day, which was 1.9 million gallons per day higher than the prior-year quarter. Gorder said jet fuel demand continues to ramp up as well and is about 80% of 2019's level.
Gorder also said product exports have been picking up, particularly to Latin America, with the easing of lockdowns in the region. Valero exported 410,000 barrels per day (BBL/d) of products from its system in June, representing the highest volume since 2018.
To cater to this increasing demand, Valero increased refinery throughput to an average of 2.8 million BBL/d in second-quarter 2021, which was 514,000 BBL/d higher than the same quarter of 2020. Throughput capacity utilization was 90%.
Gorder discussed the company's ongoing projects in its refining and renewable diesel segments. "Our Diamond Green Diesel (DGD) ... project at Saint Charles [Louisiana] remains on budget and is scheduled to be operational in the middle of the fourth quarter of this year," he said. This expansion project will increase Valero's renewable diesel production capacity by 400 million gallons per year, bringing the total capacity at Saint Charles to 690 million gallons per year of renewable diesel. The project kicked off in 2019. Subscribers to Industrial Info's Global Market Intelligence (GMI) Alternative Fuels Database can click here for the project report.
The company is building a brownfield renewable diesel plant at its refinery in Port Arthur, Texas. Gorder said, "Our Diamond Green Diesel 3 project at Port Arthur is also progressing well and is now expected to be operational in the first half of 2023. With the completion of this 470 million-gallons-per-year plant, DGD's total annual capacity is expected to be 1.2 billion gallons of renewable diesel." Subscribers can click here for the project report.
Valero's renewable diesel sales volumes averaged 923,000 gallons per day in the just-passed quarter, which was 128,000 gallons per day higher than second-quarter 2020.
Optimization projects in Valero's traditional Refining sector remain on track. Among these is the addition of delayed coker unit at its Port Arthur Refinery, construction of which kicked off in 2019. The 55,000-BBL/d delayed coker will produce additional vacuum gas oil to supply both the refinery's hydrocrackers. Aspects of the project were delayed by COVID-19, and it is expected to be completed in 2023. Subscribers to Industrial Info's Refining Database can click here for the project report.
Valero expects capital investments this year of approximately $2 billion. About 60% of this will be allocated to sustaining the business and 40% to growth. More than half of this growth capital has been allocated to expanding the company's renewable diesel business.
Valero reported adjusted second-quarter 2021 net income of $197 million, compared with an adjusted net loss of $504 million in the second quarter of 2020.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn.
