Crude Summit: Valero looks abroad, with help
US independent refiner Valero sees its future customers largely outside the US, but the company does not want to find them alone, chief executive Joe Gorder said today.
Growing wealth in emerging markets will pick up US demand whittled down by more efficient vehicles, Gorder told the Argus Americas Crude Summit in Houston, Texas. Especially US Gulf coast refining, aided by lower operating costs, ample water access and a wide range of feedstocks, would shift to a global supplier.
"We have got all of the advantages to be supplier to the world," Gorder said.
The US independent refiner purchased Peruvian fuel marketing business Pure Biofuels del Peru, including two products terminals, in 2018. But Valero prefers joint ventures or other partnerships to expand its products reach, relying on throughput arrangements and leasing agreements to stretch supply chains into other markets, he said.
"It is very difficult for a logistics project to compete with the refining project, from a return perspective," Gorder said. "We go about entering the market that way and it has been pretty effective for us so far."
Valero processed a new record volume of light, sweet crude in the fourth quarter of 2019. An expanded pipeline network allows Valero to cheaply tap shale production in US Gulf coast and midcontinent refineries, boosting overall throughputs.
A pair of crude topping units built over the past five years on the Texas coast allowed for that flexibility. Valero built alkylation units expecting low-sulphur gasoline regulations in the US, called Tier 3, to drive long-term octane demand. That short appears to be emerging, Gorder said.
"I think the industry in general might be running a little bit behind on compliance, because we are seeing a lot of competition and high values around the credits" used to comply with the regulation, Gorder said. "We are also seeing a lot of competition in export markets, where you can still move the higher sulphur fuel and sell it."
But refiners have needed to be choosy with investments based on a changing regulatory environment. Expectations that global lower-sulphur marine fuel requirements would create new opportunities for coking units had not directly supported wider industry investment in the billion-dollar devices, he said.
"You have got to be certain that you are not reacting to a short-term phenomenon with a long-term capital investment, or you are going to find it is obsolete before you really get it running," Gorder said.
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Indonesia's Pertamina to complete gasoline unit in Aug
Indonesia's Pertamina to complete gasoline unit in Aug
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Barge delays at Algiers lock near New Orleans
Barge delays at Algiers lock near New Orleans
Houston, 24 April (Argus) — Barges are facing lengthy delays at the Algiers lock near New Orleans as vessels reroute around closures at the Port Allen lock and the Algiers Canal. Delays at the Algiers Lock —at the interconnection of the Mississippi River and the Gulf Intracoastal Waterway— have reached around 37 hours in the past day, according to the US Army Corps of Engineers' lock report. Around 50 vessels are waiting to cross the Algiers lock. Another 70 vessels were waiting at the nearby Harvey lock with a six-hour wait in the past day. The closure at Port Allen lock has spurred the delays, causing vessels to reroute through the Algiers lock. The Port Allen lock is expected to reopen on 28 April, which should relieve pressure on the Algiers lock. Some traffic has been rerouted through the nearby Harvey lock since the Algiers Canal was closed by a collapsed powerline, the US Coast Guard said. The powerline fell on two barges, but no injuries or damages were reported. The wire is being removed by energy company Entergy. The canal is anticipated to reopen at midnight on 25 April. By Meghan Yoyotte Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Cepsa supplies HVO bunker fuel in Algeciras
Cepsa supplies HVO bunker fuel in Algeciras
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Iraq to keep 3.3mn b/d crude export cap until year end
Iraq to keep 3.3mn b/d crude export cap until year end
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