Valero Energy Corp.'s board of directors has approved the company's largest-ever capital investment project -- an expansion at its refinery in Port Arthur, Texas, that will involve the construction of a 50,000 barrel-per-day hydrocracker, a 45,000 barrel-per-day coker, and revamps and expansions of numerous other units.
The project's $2.4 billion cost includes interest and overhead. The expansion is expected to boost the refinery’s overall throughput capacity to 415,000 barrels per day, making it one of the country’s largest refineries and giving Valero more capacity to process heavy, sour feedstocks that trade at discounts to light sweet crude oil. The hydrocracker project is expected to be finished in the fourth quarter of 2010 and the coker project is expected to be finished in the second quarter of 2011.
"As with the St. Charles expansion project that we announced last year, the Port Arthur expansion project emphasizes ultra low sulfur diesel production – reflecting the significant projected growth in demand for diesel both in the U.S. and around the world," said Bill Klesse, Chairman of the Board and Chief Executive Officer of Valero Energy Corporation. "The Port Arthur and St. Charles expansion projects signal major investments in Valero’s internal growth strategy, and coupled with the stock buyback program, is part of our continued effort to maximize shareholder value by taking a balanced approach to allocating our cash flow."
Valero Energy Corp. is a Fortune 500 company based in San Antonio, with more than 22,000 employees and 2007 revenues of more than $95 billion. The company owns and operates 17 refineries throughout the United States, Canada and the Caribbean with a combined throughput capacity of approximately 3.1 million barrels per day, making it the largest refiner in North America. Valero is also one of the nation’s largest retail operators with approximately 5,800 retail and branded wholesale outlets in the United States, Canada and the Caribbean under various brand names including Valero, Diamond Shamrock, Shamrock, Ultramar, and Beacon.