Valero Energy Corporation · NYSE:VLO
Valero Energy — Corporate Update (August 2007)
28 slides from Valero Energy's corporate update, Aug 27, 2007
Slide 1: Delaware City Refinery Tour
Delaware City Refinery Tour August 27, 2007
Slide 2: Agenda
Agenda Basics of Refining Desulfurization Hydrocracking Delaware City Refinery Operations Gasification Overview Q&A Plant Tour Concluding Remarks 2
Slide 3: Crude Oil Characteristics
Crude Oil Characteristics Crudes are classified and priced by density and sulfur content Crude density is commonly measured by API gravity · API gravity provides a relative measure of crude oil density · The higher the API number, the lighter the crude Light crudes are easier to process Heavy crudes
Slide 4: Crude Oil Basics: Crude Quality by Types
Crude Oil Basics Crude Quality by Types Estimated Quality of Reserves (2006) 4.0% SOUR Cold Lake 3.5% Cerro Negro Maya WCS 3.0% CONTENT M-100 (resid) Arab Heavy Sweet 2.5% High Acid Arab Medium 20% (Sweet) Dubai Light/Medium SULFUR Napo 2% 2.0% Mars Sour Iran Heavy Arab Light Ameriven-Hamaca 2010 13
Slide 5: What's in a Barrel of Crude Oil?
What’s in a Barrel of Crude Oil? Crude Types Characteristics Yields 2005 U.S. 3% > 34 API Gravity Production Light Sweet Crude 30% < 0.7 % Sulfur (e.g. WTI, Brent, Saharan Refinery 34% 7% Blend) 35% Demand Gases Most Expensive 33% Gasoline RFG 50% Conventional 3% CARB 24 – 34 API Gravity Medium Sour
Slide 6: Basic Refining Concepts
Basic Refining Concepts Intermediates Final Products < 90°F Propane, Butane • Refinery fuel gas and lighter • Propane · NGLs 90–220°F Straight Run More Gasoline (low • Gasoline (high octane) octane) processing Crude oil 220–315°F More • Gasoline (high octane) Naphtha Distillationprocessing • Jet fue
Slide 7: Hydroskimming/Topping Refinery
Hydroskimming/Topping Refinery Crude Unit Propane/Butane 4% Propane/ Butane Gasoline Low Octane Gasoline Reformer High Octane Gasoline RFG Tower and Naphtha 30% Conventional CARB Hydrogen Premium Light Distillation HS Kerosene/Jet Fuel Distillate LS Kerosene/Jet Fuel Sweet Desulfurizer 34% Distillat
Slide 8: Crude and Vacuum Towers
Crude and Vacuum Towers Reactor Heater Crude Atmospheric Tower Vacuum Tower Reformer 8
Slide 9: Medium Conversion: Catalytic Cracking
Medium Conversion: Catalytic Cracking Crude Unit Propane/ Propane/Butane 8% Butane Gasoline Reformer RFG Low Octane Gasoline High Octane Gasoline 45% Conventional and Naphtha CARB Tower Premium Hydrogen Distillate Light Distillation HS Kerosene/Jet Fuel LS Kerosene/Jet Fuel Desulfurizer 27% Distilla
Slide 10: High Conversion: Coking/Resid Destruction
High Conversion: Coking/Resid Destruction Crude Hydrogen Plant Gas Unit Propane/ Propane/Butane 7% Butane Gasoline RFG Tower Low Octane Gasoline Reformer High Octane Gasoline 58% Conventional and Naphtha CARB Premium Medium/ Distillation Hydrogen Heavy Distillate 28% Distillate HS Kerosene/Jet Fuel
Slide 11: FCC and Hydrocracker Reactors
FCC and Hydrocracker Reactors Fluidized Catalytic Cracker Reactor Hydrocracker Reactors Main Column Regenerator 11
Slide 12: Cokers
Cokers Delayed Coker Superstructure holds the drill and drill stem Fluid Coker — Benicia while the coke is forming in the drum 12
Slide 13: Conversion Economics
Conversion Economics U.S. Gulf Coast Refinery Margins 30 25 20 15 l / B b $ 10 S U 5 0 (5) (10) Jan-00 Jan-01 Jan-02 Jan-03 Jan-04 Jan-05 Jan-06 Jan-07 Arab Medium Hydroskimming LLS Cracking Maya Coking Need conversion capacity to capitalize on sour crude discounts · Hydroskim – Breakeven or moderat
Slide 14: Hydrocracking Basics
Hydrocracking Basics Objective Value added upgrading of high sulfur distillates to low sulfur gasoline and ultra low sulfur jet/diesel to meet air quality requirements for clean burning fuels Hydrocracking Unit HC Desulfurized Hydrocrackate Gasoline High Sulfur HC-S H2 HC-S HC-S H2 Distillate H2 H H
Slide 15: Andrew Kenner, Vice President and General Manager, Delaware City Refinery
Andrew Kenner Vice President and General Manager Delaware City Refinery 16
Slide 16: Valero Delaware City Refinery
Valero Delaware City Refinery Built by Tidewater Oil Company in 1957 Acquired by Valero in 2005 Since commissioning, Valero and previous owners have made significant modifications and environmental upgrades Total throughput of 191,000 bpd High conversion operation · 60%+ gasoline yield Staffed by mo
Slide 17: Delaware City Products and Crude Slate
Delaware City Products and Crude Slate Typical Product Slate Typical Crude Slate Product BPD % Crude S % / API BPD % Gasoline 85,000 50 Arab Heavy 2.7 / 29 75,000 45 Distillates 65,000 38 M-100 2.7 / 16 45,000 26 Propane 7,500 4 Hamaca 1.6 / 26 35,000 20 Alkylate 5,000 3 Opportunity Crudes 15,000 9
Slide 18: Delaware City Capital Investments
Delaware City Capital Investments $456 MM invested in capital improvements and $97 MM for turnaround maintenance at Delaware City since Valero’s acquisition · Major plant turnaround completed in 4Q05 Fluid Coker Flue Gas Scrubber — $200 MM Fluid Catalytic Cracking Unit Flue Gas Scrubber — $200 MM Cr
Slide 19: Gasification Overview
Gasification Overview File: GASIF03.vsd by: MEL 5/15/98 Delaware City Plant Air Separation Coke Gasification Repowering Project Plant Gas Turbine Electric Power Oxygen Clean Syngas To Refinery Coke Steam To Sulfur Fluxant Water Refinery Removal Boiler To Feed Utility Raw Syngas Exhaust Gas Water Syn
Slide 20: Appendix
Appendix
Slide 21: Delaware City Refinery Flow Diagram
Delaware City Refinery Flow Diagram 22
Slide 22: Map of Valero Refineries
Map of Valero Refineries Quebec, Canada 215,000 bpd capacity Benicia, California · 170,000 bpd capacity Paulsboro, New Jersey 195,000 bpd capacity Delaware City, Delaware Wilmington, California • 210,000 bpd capacity · 135,000 bpd capacity McKee, Texas · 170,000 bpd capacity Memphis, Tennessee · 195
Slide 23: Major Refining Processes – Crude Processing
Major Refining Processes – Crude Processing Definition · Separating crude oil into different hydrocarbon groups · The most common means is through distillation Process · Desalting – Prior to distillation, crude oil is often desalted to remove corrosive salts as well as metals and other suspended sol
Slide 24: Major Refining Processes – Cracking
Major Refining Processes – Cracking Definition · “Cracking” or breaking down large, heavy hydrocarbon molecules into smaller hydrocarbon molecules thru application of heat (thermal) or through the use of catalysts Process · Coking – Thermal non–catalytic cracking process that converts low value oils
Slide 25: Major Refining Processes – Combination
Major Refining Processes – Combination Definition · Linking two or more hydrocarbon molecules together to form a large molecule (e.g. converting gases to liquids) or rearranging to improve the quality of the molecule Process · Alkylation – Important process to upgrade light olefins to high–value gas
Slide 26: Major Refining Processes – Treating
Major Refining Processes – Treating Definition · Processing of petroleum products to remove some of the sulfur, nitrogen, heavy metals, and other impurities Process · Catalytic Hydrotreating, Hydroprocessing, sulfur/metals removal – Used to remove impurities (e.g. sulfur, nitrogen, oxygen and halide
Slide 27: List of Refining Acronyms
List of Refining Acronyms AGO – Atmospheric Gas Oil kVA – Kilovolt Amp ATB – Atmospheric Tower Bottoms LCO – Light Cycle Oil B–B – Butane–Butylene Fraction LGO – Light Gas Oil BBLS – Barrels LPG – Liquefied Petroleum Gas BPD – Barrels Per Day LSD – Low Sulfur Diesel BTX – Benzene, Toluene, Xylene LS
Slide 28: Safe Harbor Statement
Safe Harbor Statement Statements contained in this presentation that state the Company’s or management’s expectations or predictions of the future are forward–looking statements intended to be covered by the safe harbor provisions of the Securities Act of 1933 and the Securities Exchange Act of 1934