UPDATE 1-CERAWEEK-Valero Meraux FCC refinery unit may shut sometime in 2015-CEO

Tue Mar 4, 2014 9:31pm EST

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HOUSTON, March 4 (Reuters) - Valero Energy Corp may shutter the gasoline-producing fluidic catalytic cracking unit(FCC) at its Meraux, Louisiana refinery earlier in 2015 than the deadline mandated by an agreement with environmental regulators, Chief Executive Bill Klesse said on Tuesday.

The unit must by shut by the end of 2015 as part of an agreement with the U.S. Environmental Protection Agency to reduce pollution from the 125,000 barrel per day refinery located east of New Orleans.

"We are converting the Meraux refinery to a full (hydrocracking unit) refinery," Klesse told reporters at the IHS CERAWeek conference in Houston. "We have to shut the FCC at the end of 2015. It may go down earlier."

The FCC will be kept in operation for as long as it is profitable for Valero to do so, Klesse said.

An FCC uses a very fine powder known as catalyst to convert gasoil into unfinished gasoline. Fluidic refers to the catalyst, which acts like a fluid in the unit.

A hydrocracker places gasoil under high pressure and heat in the presence of hydrogen to make gasoline and diesel.

The diesel from hydrocrackers has proven to be a source of profit for U.S. refiners. The fuel can be exported at a large profit overseas.

FCCs are better at processing the sweet crude oil coming from new oil plays like the Eagle Ford fields of south Texas, Klesse said. Hydrocrackers are better for sour crude oils like that produced in Venezuela and Mexico.

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