Valero expansion still on schedule

Struggling economy doesn’t stop $1.4 billion

Valero’s $1.4 billion expansion of its St. Charles Parish refinery is moving ahead on schedule despite the downtrodden economy and the low price of oil.

The project, which will create between 30 and 50 permanent jobs and between 1,500 and 2,000 construction jobs during construction, will produce 49,000 barrels of diesel fuel and 11,000 barrels of gasoline per day when completed.

“Valero has several projects upcoming at the St. Charles refinery, the largest of which is our $1.4 billion plan to build a new hydrocracker unit to increase production of ultra low sulfur diesel,” Valero company spokesman Bill Day said. “This project will also include an expansion of the crude unit to 235,000 barrels per day.”

A hydrocracker uses heat and hydrogen to break down heavier elements of crude into diesel and kerosene.

In addition, the St. Charles refinery also plans to replace coke drums on the existing coker unit, refit the millisecond catalytic cracking unit with updated fluid catalytic cracking unit technology, and build a sulfolane unit to meet upcoming federal environmental requirements.

The expansion is expected to be complete by the end of 2010.
Oil prices have fallen about 70 percent since peaking at $147.27 in July. Light, sweet crude for January delivery was down to $42.24 a barrel, the lowest in four years. However, even with the low price of oil, and the still struggling economy, Day said that Valero has only had to make one minor change to the project.

“Due to economic uncertainties, Valero announced earlier this year that it was cutting back or delaying some upcoming capital expenditures throughout our system of 16 refineries,” Day said. “With the exception of the sulfolane unit, which was originally discussed as an even larger project, this does not affect the St. Charles refinery projects.”

Shell/Motiva not making any major changes either
The economy is also not altering the way another St. Charles refinery does business.

Kevin Thompson, the site communications manager for Shell/Motiva in Norco, said the refinery has not cancelled any upcoming projects and is not cutting any jobs due to the state of the economy.

“That’s business as usual for us,” he said.


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