With a refining capacity of nearly 2.2 million barrels per day (BBL/d), Valero Energy Corporation (NYSE:VLO) (San Antonio, Texas) maintains its bragging rights as the No. 1 refiner in the U.S, according to a report released this week by the U.S. Energy Information Administration (EIA).

In all, Industrial Info is tracking more than $35 billion in active capital and refinery maintenance projects tied to the top five companies. This includes a significant number of chemical processing projects, valued at more than $13 billion, as well as more than $18 billion in refining industry projects. Not all of the projects will proceed according to plan, and Industrial Info assesses the likelihood of each project moving forward.

EIA

The EIA's annual Refining Capacity Report contains a wealth of data as of January 1, 2018. Marathon Petroleum Corporation (NYSE:MPC) (Findlay, Ohio) kept its No. 2 standing, as did Exxon Mobil Corporation (NYSE:XMO) (ExxonMobil) (Irving, Texas) at No. 3, and Phillips 66 (NYSE:PSX) (Houston, Texas) stayed in fourth place. However, Andeavor Corporation (NYSE:ANDV) (San Antonio, Texas) replaced Motiva Enterprises LLC (Houston) as the nation's fifth biggest refiner in terms of capacity.

However, Valero is likely to be toppled from its No. 1 perch in next year's EIA report. Marathon Petroleum and Andeavor have announced plans to merge, with a combined capacity of more than 3 million BBL/d, which would easily overtake Valero as the top U.S. refiner. Marathon and Andeavor say they expect to complete the $23.3 billion deal in the second half of this year. For more information, see May 2, 2018, article - Marathon Petroleum-Andeavor Merger to Combine $5 Billion in Refining Projects.

Among its multitude of information, the EIA report features data on how the refineries received their crude supplies last year, including more than 4 billion barrels by pipeline, 1.7 billion barrels by tanker and more than 222 million barrels by barge. Crude by rail accounted for more than 98 million barrels, and crude by truck amounted to nearly 111 million barrels.

The EIA report also notes the U.S. refineries that changed ownership last year. Royal Dutch Shell plc (NYSE:RDS.A) (The Hague, Netherlands) ended its partnership in its Motiva Enterprises joint venture with Saudi Aramco (Riyadh, Saudi Arabia) last year in the U.S., which impacted the ownership of three refineries in Louisiana and Texas.

Refining throughput volumes averaged 3 million barrels per day (BBL/d) in the fourth quarter, about 5% higher than fourth-quarter 2016. Executives recently noted that the refining segment benefited from higher gasoline and distillate margins in most regions, and wider discounts for domestic sweet crudes relative to Brent crude. Hurricane Harvey resulted in $17 million worth of repairs at Valero's Gulf Coast refineries.

New Capital Projects

Industrial Info also is tracking $200 million in project activity tied to Valero Energy Corporation's (NYSE:VLO) (San Antonio, Texas) 225,000 BBL/d Texas City refinery, including a $150 million replacement of four aging coke drums within the delayed coker. Now in the early planning stage, the project would kick off construction in second-quarter 2021, with completion that same year.

In the company's conference call, Vice President of Investor Relations John Locke said the company expects about $1 billion in growth projects in 2018. Among the capital investments discussed by Chief Executive Officer Joe Gorder was the addition of alkylation units at the company's facilities in Saint Charles, Louisiana, and Houston, Texas. Work at the Houston Refinery started last year. The project includes adding a 13,000-BBL/d HF alkylation unit to convert natural gas liquids into alkylates to produce a higher-value gasoline blendstock. The project is expected to be completed in the first half of next year. Burns & McDonnell (Kansas City, Missouri) is providing engineering on the project, which has an estimated total investment value (TIV) of $300 million. For more information, see Industrial Info's project report.

The bulk of Valero's active projects can be found along the Texas and Louisiana Gulf Coast, the largest of which is the $190 million Diamond Green biodiesel plant expansion in Norco, Louisiana. The additions will significantly boost the production of renewable diesel from alternative feedstocks, such as recycled animal fat and used cooking oils, in response to the growing demand for low-carbon fuels. For more information, see Industrial Info's project report.

Other Key Gulf Coast Projects Include:

• Corpus Christi Delayed Coker Unit Upgrade

• Corpus Christi Crude Unit Upgrade

• Port Arthur Crude Unit Upgrade

• Texas City Delayed Coker Coke Drum Replacement

Valero also will benefit from joint venture projects and those by other companies. Among these is Plains All American Pipeline's expansion of the Sunrise crude oil pipeline, which runs from the Permian Basin in Texas to the company's terminal in Cushing, Oklahoma. Gorder said, "We look forward to the startup of the Sunrise Pipeline expansion, which is scheduled for November 1.

This pipeline will add another 100,000 BBL/d of Permian pricing exposure to our mid-continent refineries and displace an equal volume of less competitively priced crude." For more information, see Industrial Info's project reports on the Midland-Colorado City loop in Texas, the Colorado City-Wichita Falls loop in Texas, and the Wichita Falls-Cushing loop running into Oklahoma.

"We have a project underway to go from 160 million gallons a year to 275 million gallons a year," said Lane Riggs, the chief operating officer for Valero, of the Diamond Green project in a recent quarterly conference call. "That will start up in the third quarter."

"We've also talked about a second expansion, from 275 million to 550 million," he continued. "That final investment decision will be made in 2018 and it will stand on its own rights." The proposed project, an estimated $235 million expansion, is undergoing an extensive engineering and construction cost review, with a startup currently envisioned for the first half of 2021, according to The New Orleans Advocate.

Refinery Unit Expansions

Valero also is at work on two fluid-catalytic cracker unit (FCCU) upgrades in Texas: a $20 million upgrade at a refinery in Texas City, and a $12 million upgrade at a refinery in Three Rivers. Both will replace reactors and modify the main fractionation columns, and are expected to be completed in the fourth quarter. For more information, see Industrial Info's reports on the Texas City and Three Rivers projects.

Valero also is planning a major addition to one of its largest refineries abroad: the $139 million addition of a natural gas -fired cogeneration plant at a refinery in Pembroke, Wales. Valero plans to add a 49.9-MW Combustion Turbine Generator Set and heat-recovery steam generator (HRSG) to improve efficiency at the 220,000-BBL/d complex. It also is expected to supplement the refinery's steam supply. For more information, see Industrial Info's project report.

Site preparation on the sulfuric acid alkylation unit in Lake Charles is planned to kick off in the next few months. The 25,000-BBL/d unit will increase octane blending in the refinery's gasoline pool. Burns & McDonnell also is providing engineering on the project, which is expected to be wrapped up in the summer of 2020. The project has an estimated TIV of $400 million. For more information, see Industrial Info's project report.

In the planning stage is the expansion of the company's refinery in Port Arthur, Texas. The project was previously cancelled in 2008 but has now been restarted. Among the projects planned for the refinery is the construction of a 50,000-BBL/d delayed coker unit to produce additional vacuum gas oil to supply the hydrocrackers. Also on the books is the addition of a sulfur recovery unit at the refinery. The projects have a combined TIV of $900 million and could kick off in the second half of next year. For more information, see Industrial Info's project reports on the delayed coker unit and sulfur recovery unit.

The delayed coker and sulphur recovery unit projects are expected to kick off early next year and be completed in 2022. The 55,000-BBL/d delayed coker unit will produce additional vacuum gas oil to supply the refinery's hydrocrackers. The sulfur recovery unit will support the new coker. The projects were initially planned in 2007 but were cancelled in 2008.

Terminal Projects

Marine docks also feature in Industrial Info's terminals coverage. Valero Energy Corporation (NYSE:VLO) (San Antonio, Texas) plans to expand its Pleasure Island dock in Port Arthur, Texas, by constructing additional berths for exports of liquefied petroleum gas and refined products. Epic Engineering LLC (Orange, Texas) is performing engineering on the project, which is planned to kick in the third quarter and be completed in the first quarter of 2019.

Other projects along the Gulf Coast include the $50 million expansion of a crude oil marine terminal in Port Arthur, Texas, and $40 million in upgrades at a gasoline hydrotreater unit in Houston, Texas. The terminal expansion, which remains in its planning phase, would expand the dock and add berths for the export of liquefied petroleum gas (LPG) and refined products, while the hydrotreater upgrades, which are set to wrap up in the coming weeks, would reduce octane loss and sulfur content through the addition of reactors.

Valero also is underway with a joint venture with Magellan Midstream Partners LP to construct two refined products terminals in Texas. Construction is expected by the end of this year and will be completed in 2019.

The terminal in Hearne will include four 112,500-barrel refined products tanks, while the terminal in Taylor will include eight 62,500-barrel tanks to serve the central Texas market. In addition to the terminals, Magellan also is constructing a refined products pipeline.

Refining Capacity

Valero's refining throughput capacity utilization during the third quarter was 99%, with throughput volumes averaging 3.1 million barrels per day (BBL/d), compared with 2.9 million BBL/d in third-quarter 2017, when some of the company's refineries were impacted by Hurricane Harvey. Valero exported approximately 421,000 BBL/d of gasoline and distillate during the quarter.

Among its multitude of information, the EIA report features data on how the refineries received their crude supplies last year, including more than 4 billion barrels by pipeline, 1.7 billion barrels by tanker and more than 222 million barrels by barge. Crude by rail accounted for more than 98 million barrels, and crude by truck amounted to nearly 111 million barrels.

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