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Released January 28, 2022 | SUGAR LAND
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Researched by Industrial Info Resources (Sugar Land, Texas)--Refiner and alternative fuels producer Valero Energy Corporation (NYSE:VLO) (San Antonio, Texas) had a strong fourth-quarter 2021, and the company seems to have put its $1.8 billion in 2021 capital investments to good use. Operating incomes across all three of the company's major segments, Refining, Renewable Diesel and Ethanol, were up for the quarter compared with the fourth quarter of last year. Valero reported net income of $1 billion for fourth-quarter 2021, compared with a net loss of $359 million for the corresponding period of 2020.
In a Thursday conference call with analysts, Valero Chief Executive Officer Joe Gorder spoke of the company's accomplishments in the just-passed quarter as well as the status of current capital projects.
Refining
The Refining segment reported operating income of $1.3 billion in fourth-quarter 2021, compared with an operating loss of $377 million in fourth-quarter 2020. Throughput volumes averaged 3 million barrels per day (BBL/d), which was 483,000 BBL/d higher than the corresponding period of 2020.
Among the company's refining projects is the addition of a 55,000-BBL/d delayed coker unit at its 395,000-BBL/d refinery in Port Arthur, Texas, to produce additional vacuum gas oil to supply both the refinery's hydrocrackers. Gorder said the project, "which is expected to increase the refinery's utilization rate and improve turnaround efficiency, is expected to be completed in the first half of 2023." Subscribers to Industrial Info's Global Market Intelligence (GMI) Refining Project Database can click here for the detailed report.
Gorder said, "Looking ahead, we remain optimistic on refining margins, with low global light product inventories, strong product demand, global supply tightness due to significant refining capacity rationalization and wider sour crude oil differentials."
Renewable Diesel
The Renewable Diesel segment reported $150 million in operating income in the fourth quarter of 2021 versus $127 million in the prior-year quarter. Among Valero's accomplishments in this sector was the early completion of an expansion project at its Diamond Green Diesel (DGD) plant in Norco, Louisiana. Gorder said, "The expansion has since demonstrated production capacity of 410 million gallons per year of renewable diesel as a result of process optimization, above the initial nameplate design capacity of 400 million gallons per year. This expansion brings DGD's total annual renewable diesel capacity to 700 million gallons." Subscribers to Industrial Info's Alternative Fuels Project Database can click here for the report.
Valero also is underway with its DGD 3 project in Port Arthur, which entails construction of a brownfield plant to produce 470 million gallons per year of renewable diesel. Gorder said the project was ahead of schedule and is now expected to be operational in first-quarter 2023. Subscribers can click here for the project report. "With the completion of this," said Gorder, "DGD's total annual capacity is expected to be 1.2 billion gallons of renewable diesel and 50 million gallons of renewable naphtha."
Ethanol
Valero's Ethanol segment reported record operating income of $474 million for the recently passed quarter, compared with $15 million in fourth-quarter 2020. Ethanol production volumes averaged 4.4 million gallons per day in the fourth quarter of 2021, which was 278,000 gallons per day higher than the fourth quarter of 2020. The company mainly attributed the higher operating income to higher ethanol product prices, supported by strong demand and low inventories.
With eight of its ethanol plants connected to the system, Valero is expected to be the anchor shipper on Navigator Energy Services LLC (Dallas, Texas) and BlackRock's (NYSE:BLK) (New York, New York) carbon capture and sequestration system in the U.S. Midwest, a network of gathering systems, pipelines and storage sites. Gorder said the project is progressing on schedule and expected to begin startup activities in late 2024 and that the system should provide Valero with a higher ethanol product margin. Subscribers to Industrial Info's Terminals and Pipeline project database can click here for related reports.
Valero's capital investments for 2021 were $1.8 billion. Capital expenditures in 2022 are expected to be about $2 billion, with about 60% of this allocated to sustaining the business and 40% to growth.
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 a Thursday conference call with analysts, Valero Chief Executive Officer Joe Gorder spoke of the company's accomplishments in the just-passed quarter as well as the status of current capital projects.
Refining
The Refining segment reported operating income of $1.3 billion in fourth-quarter 2021, compared with an operating loss of $377 million in fourth-quarter 2020. Throughput volumes averaged 3 million barrels per day (BBL/d), which was 483,000 BBL/d higher than the corresponding period of 2020.
Among the company's refining projects is the addition of a 55,000-BBL/d delayed coker unit at its 395,000-BBL/d refinery in Port Arthur, Texas, to produce additional vacuum gas oil to supply both the refinery's hydrocrackers. Gorder said the project, "which is expected to increase the refinery's utilization rate and improve turnaround efficiency, is expected to be completed in the first half of 2023." Subscribers to Industrial Info's Global Market Intelligence (GMI) Refining Project Database can click here for the detailed report.
Gorder said, "Looking ahead, we remain optimistic on refining margins, with low global light product inventories, strong product demand, global supply tightness due to significant refining capacity rationalization and wider sour crude oil differentials."
Renewable Diesel
The Renewable Diesel segment reported $150 million in operating income in the fourth quarter of 2021 versus $127 million in the prior-year quarter. Among Valero's accomplishments in this sector was the early completion of an expansion project at its Diamond Green Diesel (DGD) plant in Norco, Louisiana. Gorder said, "The expansion has since demonstrated production capacity of 410 million gallons per year of renewable diesel as a result of process optimization, above the initial nameplate design capacity of 400 million gallons per year. This expansion brings DGD's total annual renewable diesel capacity to 700 million gallons." Subscribers to Industrial Info's Alternative Fuels Project Database can click here for the report.
Valero also is underway with its DGD 3 project in Port Arthur, which entails construction of a brownfield plant to produce 470 million gallons per year of renewable diesel. Gorder said the project was ahead of schedule and is now expected to be operational in first-quarter 2023. Subscribers can click here for the project report. "With the completion of this," said Gorder, "DGD's total annual capacity is expected to be 1.2 billion gallons of renewable diesel and 50 million gallons of renewable naphtha."
Ethanol
Valero's Ethanol segment reported record operating income of $474 million for the recently passed quarter, compared with $15 million in fourth-quarter 2020. Ethanol production volumes averaged 4.4 million gallons per day in the fourth quarter of 2021, which was 278,000 gallons per day higher than the fourth quarter of 2020. The company mainly attributed the higher operating income to higher ethanol product prices, supported by strong demand and low inventories.
With eight of its ethanol plants connected to the system, Valero is expected to be the anchor shipper on Navigator Energy Services LLC (Dallas, Texas) and BlackRock's (NYSE:BLK) (New York, New York) carbon capture and sequestration system in the U.S. Midwest, a network of gathering systems, pipelines and storage sites. Gorder said the project is progressing on schedule and expected to begin startup activities in late 2024 and that the system should provide Valero with a higher ethanol product margin. Subscribers to Industrial Info's Terminals and Pipeline project database can click here for related reports.
Valero's capital investments for 2021 were $1.8 billion. Capital expenditures in 2022 are expected to be about $2 billion, with about 60% of this allocated to sustaining the business and 40% to growth.
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.
