UPDATE 1-Ex-Valero CEO Greehey starts new venture with bids

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By Jim Forsyth

SAN ANTONIO, April 3 (Reuters) - Former Valero Energy Corp. (VLO.N) Chief Executive Bill Greehey said on Tuesday his new venture, NuStar Energy (NS.N), started its first official day of operation by bidding on two Citgo Petroleum Corp. asphalt plants up for sale.

The aggressive start to NuStar, a spin-off of leading U.S. refiner Valero's petroleum pipeline and terminal operations, will be followed by further acquisitions.

"The strategy we're following is the Valero strategy," Greehey said. "We're going to be very aggressive, we're going to look at acquisitions, they've got to be accretive, there's got to be organic growth."

Greehey led Valero for 26 years, stepping down as chairman last year, taking the company from a small energy concern to the leading U.S. refiner, primarily by acquiring refineries.

Many analysts scoffed at Greehey's view of a developing tight supply-demand balance for motor fuels in the U.S. market in the late 1990s.

Greehey, who is NuStar's chairman, has a similar view of asphalt in 2007.

"Our vision is that asphalt is going to become a premium product," he said. "The reason is that, today, more and more refineries are upgrading to squeeze more fuel out of a barrel of oil, there's not much bottom of the barrel, so there's not a lot of asphalt."

Greehey's view of asphalt runs counter to the view of many refiners, who, like Citgo, are shedding asphalt operations in favor of more lucrative motor fuel production.

The two asphalt plants make Citgo, through its Carco subsidiary, the largest asphalt supplier on the U.S. East Coast.

Carco has been for sale for about a year as would-be bidders for an 84,000 barrel per day Paulsboro, New Jersey, plant and a 28,000 bpd Savannah, Georgia, plant were sought.

NuStar starts off as one of the world's largest petroleum storage and terminal companies with 80 million barrels worth of petroleum storage in seven countries.

NuStar also owns 9,000 miles of pipelines carrying crude oil, refined products and other materials like ammonia.

Last year, Valero spun off its pipelines and terminals into Valero L.P. and Valero GP Holdings. The two companies became NuStar Energy L.P. and NuStar GP Holdings LLC (NSH.N) on Tuesday.