Valero Says It Plans to Restart Aruba Oil Refinery in `Next Several Days'
Stock Chart for Valero Energy Corp (VLO)
Valero Energy Corp. plans to begin the restart of its Aruba oil refinery “within the next several days,” the company said in an e-mailed statement.
Valero shut the plant indefinitely on Aug. 26, 2009, after it lost money in the second quarter of that year. Since then, the company has overhauled the refinery to prepare for a restart if margins improved and to make it more attractive to buyers.
“The startup process will begin on selected refinery units and will continue through December, with the expectation that all refinery units will be operating fully by the end of January,” Valero said in the statement.
Valero, which announced the sale of two of its 17 North American refineries this year, is seeking a buyer for Aruba. The 235,000-barrel-a-day refinery, third largest in the Caribbean, has been for sale for more than three years.
Bill Day, a spokesman for San Antonio-based Valero, said in an e-mail Dec. 10 that it will be an advantage “having Aruba making intermediates while we have Gulf Coast units in turnarounds” in the first quarter.
The Aruba refinery can produce distillate fuel, intermediate feedstocks and blending components for the U.S., South American and European markets. The plant, which can process lower-cost heavy, high-sulfur crude oil, was a supplier to Valero’s seven other Gulf Coast refineries.
Valero, along with the government of Aruba, also announced that they had signed a memorandum of understanding addressing the delivery of a liquefied natural gas to Aruba, “which will help reduce utility costs and lower emissions on the island,” according to the release.
The largest plants in the region are the Hovensa refinery in the Virgin Islands, a joint venture between Petroleos de Venezuela SA and Hess Corp., followed by the Isla plant in the Netherlands Antilles operated by PDVSA.
Heavy, sour Maya crude from Mexico, the kind the Aruba plant processes, was worth $9.49 a barrel less than light, sweet West Texas Intermediate oil as of Dec. 10, according to data compiled by Bloomberg. That compares with a discount of $4.89 a barrel on Aug. 3, 2009. Plants that process heavy, sour crudes can be more profitable as the discounts for those grades widen.
The premium of heating oil over crude oil, or crack spread, based on January contracts, was $15.43 a barrel as of Dec. 10 on the New York Mercantile Exchange. Heating oil is traded as a surrogate for other distillates, including diesel.
Valero is the largest of the U.S. independent oil refiners, companies without oil or natural gas production. Its 15 North American plants can process more than 2.8 million barrels of oil a day.
The company sold its refinery in Delaware to PBF Energy Co. LLC, the partnership backed by private-equity firms Blackstone Group LP and First Reserve Corp. Valero in September agreed to sell its Paulsboro, New Jersey, refinery, also to PBF.
Valero fell 15 cents, or 0.7 percent, $21.47 at 12:39 p.m. in New York Stock Exchange composite trading.
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