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Released February 10, 2020 | SUGAR LAND
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Researched by Industrial Info Resources (Sugar Land, Texas)--While Valero Energy Corporation's (NYSE:VLO) (San Antonio, Texas) net profit for full-year 2019 was down year over year, the company performed well in the just-passed fourth quarter, thanks largely to its Ethanol and Renewable Diesel business segments, where operating income grew.
Valero's largest segment is Refining, and the segment faced a challenging year thanks to narrow sour crude oil differentials, primarily due to sanctions on Venezuela and Iran, as well as production curtailments from OPEC and Canada. Differentials on U.S. sweet crude narrowed in the second half of the year with the startup of new pipelines from the Permian Basin to the Texas Gulf Coast. Valero's refining throughput volumes averaged 3 million barrels per day (BBL/d) in the just-passed quarter, consistent with the year-prior quarter. The segment posted operating income of $1.4 billion, compared with $1.5 billion in fourth-quarter 2018.
Several key refining projects, on track to be completed in the coming years, could grow the company's refining profits in the future. Among the projects set to come online this year is the addition of an alkylation unit at the company's Saint Charles Refinery in Louisiana. The new 17,000-BBL/d sulfuric acid alkylation unit will increase octane blending in the gasoline pool. The $400 million project kicked off early last year and is expected to wrap up this summer. Burns & McDonnell Incorporated (Kansas City, Missouri) is providing engineering, procurement and construction. For more information, see Industrial Info's project report.
At Valero's refinery in Port Arthur, Texas, the company is performing a $975 million expansion with various components, including a crude unit upgrade to increase the throughput of heavy sour crude oil and the addition of delayed coker and sulfur recover units. The 55,000-BBL/d, four-drum delayed coker will produce additional vacuum gas oil to supply the refinery's hydrocrackers. The 600-ton-per-day sulfur recovery unit (SRU) will support the delayed coker. Construction on the delayed coker and SRU kicked off last year and is expected to be completed in early 2022. The crude unit upgrade will kick off later this year and be completed by yearend. For more information, see Industrial Info's project reports on the delayed coker unit, SRU and crude unit upgrade.
While the company's Refining segment showed a year-over-year decline in operating income, its Ethanol segment reported $36 million in operating income, compared with an operating loss of $27 billion in fourth-quarter 2018, primarily due to higher ethanol prices. Its Renewable Diesel segment reported $541 million in operating income, compared with $101 million in the prior-year quarter. Renewable diesel sales volumes averaged 844,000 gallons per day in the quarter, an increase of 124,000 gallons per day versus fourth-quarter 2018.
According to Valero, the company is the largest renewables fuels producer in North America, and it continues to explore growth opportunities in this area. Among its Alternative Fuels projects is the expansion of its renewable diesel plant in Norco, Louisiana, which will increase production capacity from 275 million gallons per year to 675 million gallons per year. The project is expected to be completed by the end of next year. For more information, see Industrial Info's project report.
Valero also is underway with an engineering and cost review of a grassroot renewable diesel plant at its Port Arthur facility. If the project is approved, operations would commence in 2024. For more information, see Industrial Info's project report.
Valero reported fourth-quarter 2019 net income of $1.1 billion, compared with $952 million in fourth-quarter 2018. Full-year 2019 net income was $2.4 billion, compared with $3.1 billion in the prior year. The company expects capital expenditures in 2020 to be approximately $2.5 billion, consistent with spending over the past six years.
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. For more information on our coverage, send inquiries to info@industrialinfo.com or visit us online at http://www.industrialinfo.com.
Valero's largest segment is Refining, and the segment faced a challenging year thanks to narrow sour crude oil differentials, primarily due to sanctions on Venezuela and Iran, as well as production curtailments from OPEC and Canada. Differentials on U.S. sweet crude narrowed in the second half of the year with the startup of new pipelines from the Permian Basin to the Texas Gulf Coast. Valero's refining throughput volumes averaged 3 million barrels per day (BBL/d) in the just-passed quarter, consistent with the year-prior quarter. The segment posted operating income of $1.4 billion, compared with $1.5 billion in fourth-quarter 2018.
Several key refining projects, on track to be completed in the coming years, could grow the company's refining profits in the future. Among the projects set to come online this year is the addition of an alkylation unit at the company's Saint Charles Refinery in Louisiana. The new 17,000-BBL/d sulfuric acid alkylation unit will increase octane blending in the gasoline pool. The $400 million project kicked off early last year and is expected to wrap up this summer. Burns & McDonnell Incorporated (Kansas City, Missouri) is providing engineering, procurement and construction. For more information, see Industrial Info's project report.
At Valero's refinery in Port Arthur, Texas, the company is performing a $975 million expansion with various components, including a crude unit upgrade to increase the throughput of heavy sour crude oil and the addition of delayed coker and sulfur recover units. The 55,000-BBL/d, four-drum delayed coker will produce additional vacuum gas oil to supply the refinery's hydrocrackers. The 600-ton-per-day sulfur recovery unit (SRU) will support the delayed coker. Construction on the delayed coker and SRU kicked off last year and is expected to be completed in early 2022. The crude unit upgrade will kick off later this year and be completed by yearend. For more information, see Industrial Info's project reports on the delayed coker unit, SRU and crude unit upgrade.
While the company's Refining segment showed a year-over-year decline in operating income, its Ethanol segment reported $36 million in operating income, compared with an operating loss of $27 billion in fourth-quarter 2018, primarily due to higher ethanol prices. Its Renewable Diesel segment reported $541 million in operating income, compared with $101 million in the prior-year quarter. Renewable diesel sales volumes averaged 844,000 gallons per day in the quarter, an increase of 124,000 gallons per day versus fourth-quarter 2018.
According to Valero, the company is the largest renewables fuels producer in North America, and it continues to explore growth opportunities in this area. Among its Alternative Fuels projects is the expansion of its renewable diesel plant in Norco, Louisiana, which will increase production capacity from 275 million gallons per year to 675 million gallons per year. The project is expected to be completed by the end of next year. For more information, see Industrial Info's project report.
Valero also is underway with an engineering and cost review of a grassroot renewable diesel plant at its Port Arthur facility. If the project is approved, operations would commence in 2024. For more information, see Industrial Info's project report.
Valero reported fourth-quarter 2019 net income of $1.1 billion, compared with $952 million in fourth-quarter 2018. Full-year 2019 net income was $2.4 billion, compared with $3.1 billion in the prior year. The company expects capital expenditures in 2020 to be approximately $2.5 billion, consistent with spending over the past six years.
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. For more information on our coverage, send inquiries to info@industrialinfo.com or visit us online at http://www.industrialinfo.com.
