Refinery Operations

5 Pages   |   671 Words
Valero Energy Corporation operates in the chemicals and energy businesses; it is an international manufacturer and distributor of petrochemical products, mainly transportation fuels, and power. The business deals with refining crude oils and other such feedstock to produce high quality products like gasoline, jet fuel, aromatics, etc, which can then be distributed and sold directly or indirectly via other partners to the final customers. Based in San Antonio, USA, it operates through a large number of outlets across the States as well as Canada, UK and Ireland (Valero Marketing and Supply Company, 2013). In terms of the refining business, it is divided geographically within the U.S. Gulf Coast, U.S. Mid-Continent, U.S. West Coast, and North Atlantic regions (Valero Energy Corporation, 2012).
 

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Valero’s refining business is run via 16 refineries across the US and North Atlantic regions (as mentioned earlier), which provide it a throughout capacity of about 3 million barrels per day (Valero Energy Corporation, 2012). Amongst these its major region is that of the U.S. Gulf Coast which provides more than half the total capacity, of up to 1.78 million barrels per day (Valero Energy Corporation, 2012). The refineries within this region are location in Texas (5 refineries), Aruba (1 refineries), and Louisiana (2 refineries). The one in Aruba was closed down in March 2012, but it provided capacity of 235, 000 barrels per day while it was in operation. The 2 refineries in Louisiana, Meraux and St. Charles both provide capacities of 135, 000 and 270, 000 barrels per day respectively (Valero Energy Corporation, 2012). The Texan refineries, Corpus Christi (East and West), Port Arthur, Texas City, Houston, and Three Rivers all have capacities of 325,000; 310,000; 245,000; 160,000; and 100,000 barrels per day respectively (Valero Energy Corporation, 2012). Hence the Gulf Coast is Valero’s most important region, with one of the largest capacity refineries of the business.
For the production of their final products such as gasoline, petrochemicals and asphalt etc, (Valero Marketing and Supply Company, 2013) these refineries run raw materials like sour crude oil and residual fuel oil etc. In this regard, the Gulf Coast refineries refine the following feedstocks in the given percentages;
Charges Percentages (%)
Sour crude oil 53
Acidic sweet crude oil 2
Sweet crude oil 14
Residual fuel oil 13
Other feedstocks 5
Blendstocks 13
The yields of these feedstock are as follows, again in percentage:
Charges Percentages (%)
Gasolines and Blendstocks 44
Distillates 34
Petrochemicals 4
Others (gas oil, No. 6 fuel oil,
petroleum coke, and asphalt)
18
The production of high quality products requires major investments in high-end facilities that can run efficiently, giving maximum output and minimum losses. Valero’s Texas refinery is located about 40 miles southeast of Houston and refines sour crude oils to produce a wide variety of products like gasoline, diesel, LPGs, propylene, etc (Valero Marketing and Supply Company, 2013). In order to maximize production, the refinery has undergone many improvements over the years. Its equipment includes;
  • Gas Oil Hydrotreater (100, 000 bpd)
  • Residual Oil Solvent Extraction Units (40, 000 bpd)
  • Fluid Catalytic Cracking Unit
  • Delayed Coker (52, 000 bpd)
  • Gasoline Desulphurization Unit
Valero is well-known in its industry for its investment in its business in terms of finances as well as honest efforts of its management and employees to achieve excellence in their processes and activities. This is why the company has been able to perform quite well in its field and the 2012 annual report shows operating income of $4 billion and net income of $2.1 billion, which makes its shareholders equally satisfied (Valero Energy Corporation, 2012).
 

Bibliography

Valero Energy Corporation. (2012). Form 10-K. Retrieved December 03, 2013, from Valero: http://www.valero.com/InvestorRelations/FinancialReports_Filings_Statements/Documents/VEC_10K_2012.pdf
Valero Energy Corporation. (2012). Summary Annual Report. Retrieved December 03, 2013, from Valero: http://media.valero.com/flash/annualreport2012/pdf/report.pdf
Valero Marketing and Supply Company. (2013). Our Business. Retrieved December 03, 2013, from http://www.valero.com/OurBusiness/Pages/Home.aspx
Valero Marketing and Supply Company. (2013). Products That Improve People's Lives. Retrieved December 03, 2013, from http://www.valero.com/Products/pages/Home.aspx
Valero Marketing and Supply Company. (2013). Texas City Overview. Retrieved December 03, 2013, from http://www.valero.com/OurBusiness/OurLocations/Refineries/Pages/TexasCity.aspx

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