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Released January 27, 2023 | SUGAR LAND
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Researched by Industrial Info Resources (Sugar Land, Texas)--Executives at Valero Energy Corporation (NYSE:VLO) (San Antonio, Texas) had reason to smile on Thursday when the company reported fourth-quarter 2022 net income of $3.1 billion, compared with $1 billion in fourth-quarter 2021. Strong margins and high capacity utilization helped boost the operating income of the company's Refining segment to more than $4 billion in the recently passed quarter.
In Thursday's earnings-related conference call, Valero Chief Executive Officer Joe Gorder said, "As we saw during most of 2022, refining margins were supported by low product inventories, which resulted from the significant permanent global refinery shutdowns and the continued recovery of product demand." Valero's refining system also benefited from heavily discounted sour crude oils and fuel oils.
In addition, Valero's refineries operated at a 97% capacity utilization rate in the fourth quarter, the highest utilization rate for the company's system since 2018.
Valero's Refining segment reported operating income of $4.3 billion, compared with $1.3 billion in fourth-quarter 2021.
Gorder said that the company's projects to improve margin capture remain on track, with the addition of a delayed coker unit at Valero's refinery in Port Arthur, Texas, on track for completion in the second quarter of this year. Gorder said the addition would increase the refinery's throughput capacity and ability to process incremental volumes of sour crude oils and residual feedstocks as well as improve turnaround efficiency.
Construction of the 55,000-barrel-per-day (BBL/d) delayed coker unit kicked off in 2019 and will provide additional vacuum gas oil to supply both of the refinery's hydrocrackers. A sulfur recovery unit to support the coker also is being developed. Subscribers to Industrial Info's Global Market Intelligence (GMI) Refining Project Database can click here for more details on the delayed coker and click here for the report on the sulfur recovery unit.
Other projects at Valero's refineries include replacing four coke drums that have reached the end of their lives from the 53,000-BBL/d delayed coker at Valero's refinery in Texas City, Texas. The project kicked off recently and is expected to be completed in the coming months. Subscribers can click here for more information.
The recently passed fourth quarter also gave the company cause for celebration in its Renewable Diesel segment with the successful startup of its DGD3 production unit in Port Arthur for Valero's Diamond Green Diesel joint venture. Gorder said the startup of the plant brings Diamond Green Diesel's annual production capacity to approximately 1.2 billion gallons of renewable diesel and 50 million gallons of renewable naphtha. Subscribers to Industrial Info's Alternative Fuels Plant Database can click here for the plant profile.
The startup of the plant helped boost Valero's renewable diesel sales volumes to an average of 2.4 million gallons per day in the fourth quarter, which was 851,000 gallons per day higher than the previous-year quarter. Valero's Renewable Diesel segment reported operating income of $261 million in the just-passed quarter, compared with $150 million in fourth-quarter 2021.
Valero's third operating segment, Ethanol, didn't fare as well as the company's other areas. The Ethanol segment reported operating income of $7 million, compared with $474 million in 2021. The company attributed 4Q21's higher income to high ethanol prices due to strong demand and low inventories.
But a carbon-capture project on track for completion in 2024 is set to raise the margin profile and competitive positioning of Valero's ethanol business. BlackRock Incorporated (NYSE:BLK) (New York, New York) and Navigator Energy Services LLC's (Dallas, Texas) planned Heartland Greenway carbon capture and sequestration system will be connected to eight of Valero's ethanol plants and will include a network of pipelines in the Midwest and a carbon-storage site in Illinois. Valero will be the anchor shipper on the system. The result will be ethanol with a lower carbon intensity. Subscribers to Industrial Info's Terminals and Pipelines Project Databases can click here for the related project reports.
Subscribers to Industrial Info's GMI Database can click here for a look at the reports for all of the projects discussed in this article, and click here for the related plant profiles.
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking over 200,000 current and future projects worth $17.8 trillion (USD).
In Thursday's earnings-related conference call, Valero Chief Executive Officer Joe Gorder said, "As we saw during most of 2022, refining margins were supported by low product inventories, which resulted from the significant permanent global refinery shutdowns and the continued recovery of product demand." Valero's refining system also benefited from heavily discounted sour crude oils and fuel oils.
In addition, Valero's refineries operated at a 97% capacity utilization rate in the fourth quarter, the highest utilization rate for the company's system since 2018.
Valero's Refining segment reported operating income of $4.3 billion, compared with $1.3 billion in fourth-quarter 2021.
Gorder said that the company's projects to improve margin capture remain on track, with the addition of a delayed coker unit at Valero's refinery in Port Arthur, Texas, on track for completion in the second quarter of this year. Gorder said the addition would increase the refinery's throughput capacity and ability to process incremental volumes of sour crude oils and residual feedstocks as well as improve turnaround efficiency.
Construction of the 55,000-barrel-per-day (BBL/d) delayed coker unit kicked off in 2019 and will provide additional vacuum gas oil to supply both of the refinery's hydrocrackers. A sulfur recovery unit to support the coker also is being developed. Subscribers to Industrial Info's Global Market Intelligence (GMI) Refining Project Database can click here for more details on the delayed coker and click here for the report on the sulfur recovery unit.
Other projects at Valero's refineries include replacing four coke drums that have reached the end of their lives from the 53,000-BBL/d delayed coker at Valero's refinery in Texas City, Texas. The project kicked off recently and is expected to be completed in the coming months. Subscribers can click here for more information.
The recently passed fourth quarter also gave the company cause for celebration in its Renewable Diesel segment with the successful startup of its DGD3 production unit in Port Arthur for Valero's Diamond Green Diesel joint venture. Gorder said the startup of the plant brings Diamond Green Diesel's annual production capacity to approximately 1.2 billion gallons of renewable diesel and 50 million gallons of renewable naphtha. Subscribers to Industrial Info's Alternative Fuels Plant Database can click here for the plant profile.
The startup of the plant helped boost Valero's renewable diesel sales volumes to an average of 2.4 million gallons per day in the fourth quarter, which was 851,000 gallons per day higher than the previous-year quarter. Valero's Renewable Diesel segment reported operating income of $261 million in the just-passed quarter, compared with $150 million in fourth-quarter 2021.
Valero's third operating segment, Ethanol, didn't fare as well as the company's other areas. The Ethanol segment reported operating income of $7 million, compared with $474 million in 2021. The company attributed 4Q21's higher income to high ethanol prices due to strong demand and low inventories.
But a carbon-capture project on track for completion in 2024 is set to raise the margin profile and competitive positioning of Valero's ethanol business. BlackRock Incorporated (NYSE:BLK) (New York, New York) and Navigator Energy Services LLC's (Dallas, Texas) planned Heartland Greenway carbon capture and sequestration system will be connected to eight of Valero's ethanol plants and will include a network of pipelines in the Midwest and a carbon-storage site in Illinois. Valero will be the anchor shipper on the system. The result will be ethanol with a lower carbon intensity. Subscribers to Industrial Info's Terminals and Pipelines Project Databases can click here for the related project reports.
Subscribers to Industrial Info's GMI Database can click here for a look at the reports for all of the projects discussed in this article, and click here for the related plant profiles.
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking over 200,000 current and future projects worth $17.8 trillion (USD).
