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Wednesday, July 3, 2013

Valero Adding More Hydrocracking Capacity Near Export Terminals

From RBN Energy today on Valero's plans to add more hydrocracker capacity down south:
We get the distinct feeling that there is not yet a sense of urgency among refiners to address the apparent inconsistencies between their refinery configurations, the available slate of crude and the product mix that the market requires. Given the level of activity and investment in drilling and infrastructure that we have seen in the past two years to get crude to market as well as the flurry of new terminal storage capacity and connections in refining centers, shouldn’t we be seeing more signs of activity behind refinery gates?
Nevertheless, all the evidence suggests that US refiners in general and Gulf Coast refiners in particular will have to make new investments in their refineries to take full advantage of the new crudes coming their way. If not in hydrocracker units - then in topping units that increase their capability to process very light crudes or condensates.
Valero has determined that increased hydrocracking capacity is the way to go and they have placed their bets accordingly. Now that the major pipeline investments to redirect new crude flows to market are under way, we believe the focus of industry investment will shift to addressing refinery infrastructure issues. Given the slow start so far on that investment we expect bottlenecks to shift from storage and distribution centers to refinery gates.

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