April 25, 2019 / 5:20 PM / 2 months ago

Valero refineries to run at up to 93 percent of capacity in second quarter

HOUSTON (Reuters) - U.S. independent refiner Valero Energy Corp plans to run its 14 refineries up to 93 percent of their combined capacity of 3.1 million barrels-per-day (bpd) in the second quarter of 2019, said Homer Bhullar, vice president of investor relations, on Thursday.

Valero expects its seven U.S. Gulf Coast refineries will run up to 96 percent of their combined capacity of 1.8 million bpd during the quarter, Bhullar said during a conference call to discuss first quarter earnings with Wall Street analysts.

The company’s 145,000 barrel-per-day (bpd) Benicia, California, refinery is expected to restart in mid to late May following an overhaul, said Chief Operating Officer Lane Riggs.

The refinery was shut in late March to repair a furnace and the company decided to perform an overhaul scheduled for 2020 while the plant was out of service, Riggs said.

In early March, Valero repaired the main air blower on the 55,000 bpd gasoline-producing fluidic catalytic cracking unit at Valero’s 195,000 bpd Sunray, Texas, refinery.

Valero expects the switch to low sulfur marine fuel mandated by the International Maritime Organization on Jan. 1, 2020, will first be felt in late September and October in the high-sulfur bunker fuel market, when the last cargos of marine fuel with a sulfur content of 3.5 percent will be sent to Asia, said Chief Executive Joe Gorder.

Diesel markets, which are expected to tighten on higher demand for marine fuel with a sulfur content of 0.5 percent in January, will feel the impact in November and December, Gorder said.

Valero has replaced Venezuelan crude with a combination of Canadian crude and crude purchased on the open market including supply from Brazil going to the Gulf and West coasts of the United States, he said.

Reporting by Erwin Seba; Editing by Chizu Nomiyama and Steve Orlofsky

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