valero energy Benicia Refinery Tour – July 9, 2007

1

Benicia Refinery TourJuly 9, 2007

2

Basics of Refining

Desulfurization

Hydrocracking

Valero Refining System

Benicia Refinery Operations

CARB Gasoline with 10% Ethanol

Plant Tour

Agenda

3

Rich MarcoglieseExecutive Vice President

Refining Operations

4

Crude Oil Characteristics

Crudes are classified and priced by density and sulfur contentCrude 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 are more difficult to process

Crude sulfur content is measured as a percentage• Less than 0.7% sulfur content = sweet• Greater than 0.7% sulfur content = sour• High sulfur crudes require additional processing to meet regulatory specs

Acid content is measured by Total Acid Number (TAN)• Acidic crudes highly corrosive to refinery equipment• High acid crudes are those with TAN greater than 0.7

5

Crude Oil Basics

Majority of global reserves are light/medium sourMost quoted benchmark prices are light sweet crudes

• WTI (West Texas Intermediate), Western Hemisphere• Brent (North Sea Crude), Europe

Historical trend shows global crude supply becoming heavier and more sour

Estimated Quality of Reserves (2006)

13%

20%

66%

2%

High Acid(Sweet)

Source: Oil & Gas Journal, Company Information

Light/MediumSour

HeavySour

Sweet

SWEE

T

SU

LFU

R C

ON

TEN

T

S

OU

R

HEAVY API GRAVITY LIGHT

Crude Quality by Types

Source: Industry reportsNOTE: Red line represents the average crude quality by decade (actual and projected)

Arab Heavy

Arab Medium

Arab Light

Alaskan North Slope

Iran Heavy

DubaiMars

TapisWTIBrent

Bonny LightCabinda

Napo

Cold Lake

WCSMaya

Ameriven-Hamaca

M-100 (resid)

1980

19902000

2010

Urals

Cerro Negro

0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

3.0%

3.5%

4.0%

15 20 25 30 35 40 45 50

6

What’s in a Barrel of Crude Oil?

50%

26%

21%

3%

63%

22%

14%1%

33%

34%

30%

3%

> 34 API Gravity

< 0.7 % Sulfur

35% Demand

Most Expensive

24 – 34 API Gravity

> 0.7 % Sulfur

50% Demand

Less Expensive

< 24 API Gravity

> 0.7 % Sulfur

15% Demand

Least Expensive

Refineries upgrade crude oil to higher value products

2005 U.S. Production

8% Propane/Butane

50%

GasolineRFGConventionalCARBPremium

33% DistillateJet FuelDieselHeating Oil

Heavy Fuel Oil & Other

10%

Source: EIA Refiner Production

Refinery Gases7%

Light Sweet Crude(e.g. WTI, Brent, Saharan

Blend)

Medium Sour Crude(e.g. Mars, Arab Light,Arab Medium, Urals)

Heavy Sour Crude(e.g. Maya, Cerro Negro, Cold

Lake, Western Canadian Select)

Crude Types Characteristics Yields

7

Basic Refining Concepts

DistillationTower

(CrudeUnit)

Propane, Butane and lighter

• Refinery fuel gas • Propane• NGLs

< 90°F

Straight Run Gasoline (low

octane)• Gasoline (high octane)

90–220°F

Naphtha • Gasoline (high octane)• Jet fuel

220–315°F

Kerosene• Kerosene • Jet fuel• Diesel • Fuel oil

315–450°F

Light Gas Oil• Gasoline (high octane)• Diesel• Fuel oil

450–650°F

Heavy Gas Oil650–800°F

Residual Fuel Oil/Asphalt

800+°F

Furnace

VacuumUnit

More

• Gasoline (high octane)• Diesel• Fuel oil

• Gasoline (high octane)• Diesel• Fuel oil• Lube stocks

Intermediates Final Products

processing

More

processing

More

processing

More

processing

More

processing

More

processing

Crude oil

8

Hydroskimming/Topping Refinery

LightSweetCrude

100% Total Yield

Heavy Fuel Oil & Other

30%GasolineRFGConventionalCARBPremium

Simple, low upgrading capability refineries run sweet crude

Propane/Butane

Hydrogen

Crude Unit

Vacuum Unit

Reformer

Propane/Butane

High Octane Gasoline

Heavy Fuel Oil

LS Diesel/Heating Oil

Distillate Desulfurizer

HS Diesel/Heating Oil

HS Kerosene/Jet Fuel

Gas Oil

4%

32%


Dis

tilla

tion

Tow

er

Low Octane Gasoline and Naphtha

LS Kerosene/Jet Fuel

9

Crude and Vacuum Towers

Crude Atmospheric Tower Vacuum Tower Reformer

Heater

Reactor

10

Medium Conversion: Catalytic Cracking

Moderate upgrading capability refineries tend to run more sour crudeswhile achieving increased higher value product yields and volume gain

Hydrogen

Light Cycle Oil (LCO)

Crude Unit

Vacuum Unit

Reformer

Alkylation Unit

Propane/Butane


Heavy Fuel Oil

FCC Gasoline

Alkylate

Distillate Desulfurizer



Gas OilFluid Catalytic Cracker (FCC)

104% Total Yield

Heavy Fuel Oil & Other24%

Dis

tilla

tion

Tow

er

Propane/Butane8%



LightSour

Crude

Low Octane Gasoline and Naphtha



11

High Conversion: Coking/ResidDestruction

Complex refineries can run heavier and more sour crudes while achieving the highest light product yields and volume gain

108% Total Yield

Heavy Fuel Oil & Other15%

Propane/Butane7%



Hydrogen

LCO

Reformer

Medium Gas Oil

Propane/Butane

Heavy Fuel Oil

FCC Gasoline

Alky Gasoline

Hydrogen Plant

Coke

Gas

DelayedCoker

Fluid Catalytic Cracker (FCC)

Alkylation Unit

DistillateDesulfurizer

Crude Unit

Vacuum Unit

Light Gas Oil Hydrocrackate Gasoline

Ultra Low Sulfur Jet/Diesel

Hydrocracker

Medium/Heavy Sour

Crude Dis

tilla

tion

Tow

er Low Octane Gasoline and Naphtha






12

FCC and Hydrocracker ReactorsReactor

RegeneratorMain Column

Hydrocracker ReactorsFluidized Catalytic Cracker

13

CokersDelayed Coker

Superstructure holds the drill and drill stem while the coke is forming in the drum Fluid Coker - Benicia

14

Conversion Economics

Need conversion capacity to capitalize on sour crude discounts• Hydroskim – Breakeven or moderate margins; High resid yield

− When margins are positive – increase crude runs− When margins are negative – decrease crude runs

• Cracking – Better margins; Lower resid yield• Coking – Best margins; Lowest resid yield

− Maximize heavy crudes

U.S. Gulf Coast Refinery Margins

(10)

(5)

0

5

10

15

20

25

30

Jan-00 Jan-01 Jan-02 Jan-03 Jan-04 Jan-05 Jan-06 Jan-07

U S

$ /

B b

l

Arab Medium Hydroskimming LLS Cracking Maya Coking

15

Desulfurization Basics

High SulfurLight

Products(HC-S)

Desulfurization Unit

Sulfur Plant• Agricultural• Pharmaceutical

Desulfurized Light Products

ElementalSulfur

HC-S

HC-SSHC-S

SS

Catalyst

HC-SS

HC-S

S

HC

H2S S

HC-S

H2

Hydrogen UnitH2

H2H2

H2

H2H2

H2

H2H2

H2

LEGENDHC : HydrocarbonH2 : HydrogenS : Sulfur


1000 or less PSI;700 F or less

ObjectiveRemove sulfur from light products (gasoline or diesel) to meet air quality requirements for clean burning fuels

16

Hydrocracking Basics



ObjectiveValue 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

High SulfurDistillate(HC-S)

Hydrocracking Unit

HC-S

HC-S

HC-S

Catalysts

HC-S

HC-S

Desulfurized Hydrocrackate GasolineHC

Sulfur Plant• Agricultural• Pharmaceutical

ElementalSulfur

SS

SSS

H2S S

HC-S

H2

H2H2

H2

Desulfurized Ultra Low Sulfur Jet/DieselHC

H2

H2 H2

H2

H2H2

1300+ PSI;725 to 780 F

H2

Hydrogen UnitH2

H2H2

H2

H2H2

17

Valero System Overview

Aruba

Throughput capacities in thousand barrels per day; Excludes 165,000 bpd Lima, OH refinery

17 Refineries Across Four Key Regions

High-complexity system and leader in conversion capacity

• Enables us to convert more low-quality, discounted feedstocks into high-quality products

Refining system designed for feedstock flexibility

• Increased variety of heavy sour and resid feedstocks from 27 in 2002 to 40 in 2006

Source: Company reports; VLO figures exclude Lima, OH refinery

Gulf Coast 1,720West Coast 305Mid-Con 455Northeast 620Total 3,100

Gulf Coast 1,720West Coast 305Mid-Con 455Northeast 620Total 3,100

3.1 million barrels per day of throughput capacity

• Scale helps mitigate effect of specific outages

Geographically diverse • Valero participates in four key regions

Optimization among regional refining systems

0

200

400

600

800

1,000

1,200

1,400

1,600

1,800

VLO XOM COP RD S BP C VX M RO TS O S U N

Cat CrackingHydrocrackingCoking

Conversion Capacity (mbpd)

18

Valero’s Commitment to SafetyContinued commitment to OSHA’s Voluntary Protection Program (VPP)

• VPP is a recognized OSHA program for excellence in safety

• Valero has 11 of only 23 VPP Star Sites in the U.S.

New Process Safety Management (PSM) initiative underway

• Created VP position in Operations to focus efforts on safety

• Achieve best-in-class PSM at all our facilities

20002001200220032004200520062007200820092010

MemphisPort Arthur

ArubaDel CityMcKee

QuebecBenicia

Corpus ChristiSt. Charles

ArdmoreWilmingtonPaulsboro

HoustonKrotz SpringsThree Rivers

Texas City

CertifiedPre-certification Re-certified

Valero’s VPP Schedule

19

Doug ComeauVice President

and General ManagerBenicia Refinery

20

Valero Benicia Refinery

Built by Exxon in 1969 on the site of the former Benicia Army ArsenalSignificant modifications and upgrades have made the refinery one of the most complex and profitable refineries in the United StatesValero acquired the refinery in 2000 and has made additional improvements since that timeValero acquired Huntway Refining Company in 2001

21

Aerial View of Benicia

SOUTHAMPTON

BENICIA INDUSTRIALPARK

CRUDETANKAGE

WWT

BRIDGE

DOCK

BENICIA INDUSTRIES

BENICIA INDUSTRIES

MAIN PROCESSAREA

OLD TOWN

ASPHALT PLANT

22

Recognized as an OSHA VPP Star Site September 2006Total throughput of 170,000 bpdPrimary products include “CARBOB”gasoline, diesel, jet fuel, LPG, fuel oil and asphaltHigh conversion operation

70%+ gasoline yieldLocated on 425 acres with 475 acre buffer zoneStaffed by 480 full-time employees200 continuing service contractors

Benicia Refinery Operations

23

Crude slate includes Alaska North Slope (ANS), San Joaquin Valley (SJV) and a wide variety of other crudes• 80% received by ship across Refinery docks• 20% received by pipeline

Shifting crude slate• When acquired in 2000, 80% of Benicia’s crude was ANS• Today, less than 40% ANS

Versatile, high-conversion facility with ability to process heavy, sour crudes• 35% heavy sour, 47% medium/light sour, 2% acidic sweet, 16%

other

Capable of processing imported intermediate feedstocksPrimary utilities used include natural gas, electric power and fresh water

Benicia Feedstocks

24

California gasoline - “CARBOB”• 80% CARBOB distributed through pipeline system

• 20% finished gasoline blended at Refinery terminal

Major supplier of Military jet fuel in northern California (pipeline)

Refinery also produces EPA diesel fuel (pipeline)• Ultra Low Sulfur Diesel (ULSD) Unit nearing completion

Flexible light-ends system allows for a variety of propane and butane dispositions and minimizes external natural gas purchases (LPG’s shipped by rail and truck)

Benicia Asphalt Plant supplies 25% of northern California asphalt market (shipped by truck)

Benicia Products

25

$484 MM invested in capital improvements and $233 MM for turnaround maintenance at Benicia since Valero acquisition

Ultra Low Sulfur Diesel Unit (ULSD) - $105 MM

Constructing New Crude Tanks (2 – 650 MB) - $60 MM

Major plant-wide turnaround completed in 4Q2004

Alky expansion project commissioned in the 1Q2004 –eliminated need to export pentanes or import high octane, low vapor pressure blendstocks - $25 MM

MTBE phase-out 2003 - $25 MM

51 MW cogeneration facility completed in 2002 - $60 MM

Benicia Capital Investments

26

Benicia Projects in Development

Valero Improvement Project (VIP) development under way for 2010 turnaround and beyond• Crude “Sour-up” to reduce dependence on ANS

− New desalter

− Sulfur removal and sulfur recovery capacity improvements

• Flue gas scrubber for Coker and FCC

• New hydrogen manufacturing unit− Improved energy efficiency

− Greenhouse Gas (GHG) reduction

27

CARB Phase III Gasoline Model Revisions for 10% Ethanol

Model changes drive increase in ethanol content from 5.7% to 10% by volumeSulfur content must be reduced to accommodate NOx increases from ethanolSulfur reductions require additional hydrotreating of FCC gasolineAromatics change reduces reformate blending and FCC gasoline cut points, which increases need for alkylate and raffinate

5.7%

10%

0%

2%

4%

6%

8%

10%

Phase III Phase III Revised

20

9

0

5

10

15

20


25.0%

22.3%

20%

21%

22%

23%

24%

25%


Increasing Ethanol Content to 10% (volume)

Requires a Reduction in Sulfur (ppm)

And a Reduction in Aromatics (volume)

Depending on refinery configuration, CARB gasoline pool could be reduced by 2% to 4%

net of ethanol

Depending on refinery configuration, CARB gasoline pool could be reduced by 2% to 4%

net of ethanol

28

Appendix

29

Benicia Refinery Flow DiagramAsphalt Plant

11 MBPDCrude

Asphalt

Distillate to HCU

VacuumDistillation10 MBPD

ATBs

Asphalt6 MBPD

PMA

Naphtha to FCC

Gas Oil to FCC

VTBs

RefineryCrude

Distillation

134 MBPD

Naphtha/Distillate

Hydrotreaters55MBPD(2 units)


Light Ends

FCC Feed Hydrotreater

39 MBPD

FCCU72 MBPD

Coker28 MBPD

Dimersol5 MBPD

Alkylation20 MBPD

CatalyticReformer35 MBPD

Hydrocracker36 MBPD

FCCGasoline

Hydrotreater45 MBPD

ATBs

Crude

Off Gas

Naphtha

Jet Fuel/Kero

Fuel Gas

PropaneButane

Gas Oil

Resid

Coke

Gas Oil

LPG

Jet Fuel/Kero

Naphtha

Naphtha

Diesel

Gasoline

P/P

B -B

Slurry

Gasoline

LPG

Low Sulfur Gasoline

Gasoline

LPG

Hydrogen

Gasoline

Propane

Gasoline

Gas OilAsphalt Gas Oil

Gas Oil

Isobutane

RefineryCrude

Distillation

134 MBPD

Naphtha/JetHydrotreaters45.3 MBPD


Light Ends

FCC Feed Hydrotreater

39 MBPD

FCCU72 MBPD

Coker28 MBPD

Dimersol5 MBPD

Alkylation20 MBPD

CatalyticReformer35 MBPD

Hydrocracker36 MBPD

FCCGasoline

Hydrotreater45 MBPD

ATBs

Crude

Off Gas

Naphtha

Jet Fuel/Kero

Diesel

Fuel Gas

PropaneButane

Gas Oil

Resid

Coke

Gas Oil

LPG

Naphtha

Naphtha

Diesel

GasolineNaphtha/Diesel

P/P

B -B

Slurry

Gasoline

LPG

Low Sulfur Gasoline

Gasoline

LPG

Hydrogen

Gasoline

Propane

Gasoline

Gas OilAsphalt Gas Oil

Gas Oil

Isobutane

Asphalt Plant11 MBPD

Crude

Asphalt

Distillate to HCU


ATBs

Asphalt6 MBPD

PMA

Naphtha to FCC

Gas Oil to FCC

VTBs

Asphalt Plant11 MBPD

Crude

Asphalt

Distillate to HCU


ATBs

Asphalt6 MBPD

PMA

Naphtha to FCC

Gas Oil to FCC

VTBs

ULSD16 MBPD

ULSD

30

Map of Valero Refineries

Valero Marketing Presence

Quebec, Canada• 215,000 bpd capacity

Three Rivers, Texas• 100,000 bpd capacity

Corpus Christi, Texas• 340,000 bpd capacity

Wilmington, California• 135,000 bpd capacity

Benicia, California• 170,000 bpd capacity

McKee, Texas• 170,000 bpd capacity

Krotz Springs, Louisiana• 85,000 bpd capacity

Texas City, Texas• 245,000 bpd capacity

Houston, Texas• 130,000 bpd capacity Port Arthur, Texas

• 325,000 bpd capacity

St. Charles, Louisiana• 250,000 bpd capacity

Ardmore, Oklahoma• 90,000 bpd capacity

Memphis, Tennessee• 195,000 bpd capacity

Paulsboro, New Jersey• 195,000 bpd capacity

San Nicholas, Aruba• 275,000 bpd capacity

Delaware City, Delaware• 210,000 bpd capacity

Capacity shown in terms of crude and feedstock throughput

31

Major Refining Processes – Topping

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 solids.• Atmospheric Distillation – Used to separate the desalted crude into specific

hydrocarbon groups (straight run gasoline, naphtha, light gas oil, etc.) or fractions.

• Vacuum Distillation – Heavy crude residue (“bottoms”) from the atmospheric column is further separated using a lower–pressure distillation process. Means to lower the boiling points of the fractions and permit separation at lower temperatures, without decomposition and excessive coke formation.

32

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 to

higher value gasoline, gas oils and marketable coke. Residual fuel oil from vacuum distillation column is typical feedstock.

• Visbreaking – Thermal non–catalytic process used to convert large hydrocarbon molecules in heavy feedstocks to lighter products such as fuel gas, gasoline, naphtha and gas oil. Produces sufficient middle distillates to reduce the viscosity of the heavy feed.

• Catalytic Cracking – A central process in refining where heavy gas oil range feeds are subjected to heat in the presence of catalyst and large molecules crack into smaller molecules in the gasoline and surrounding ranges.

• Catalytic Hydrocracking – Like cracking, used to produce blending stocks for gasoline and other fuels from heavy feedstocks. Introduction of hydrogen in addition to a catalyst allows the cracking reaction to proceed at lower temperatures than in catalytic cracking, although pressures are much higher.

33

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

gasoline components. Used to combine small molecules into largemolecules to produce a higher octane product for blending with gasoline.

• Catalytic Reforming – The process whereby naphthas are changed chemically to increase their octane numbers. Octane numbers aremeasures of whether a gasoline will knock in an engine. The higher the octane number, the more resistance to pre or self–ignition.

• Polymerization – Process that combines smaller molecules to produce high octane blending stock.

• Isomerization – Process used to produce compounds with high octane for blending into the gasoline pool. Also used to produce isobutene, an important feedstock for alkylation.

34

Major Refining Processes – Treating

Definition• Processing of petroleum products to remove some of the sulfur, nitrogen,

heavy metals, and other impuritiesProcess• Catalytic Hydrotreating, Hydroprocessing, sulfur/metals removal – Used to

remove impurities (e.g. sulfur, nitrogen, oxygen and halides) from petroleum fractions. Hydrotreating further “upgrades” heavy feeds by converting olefins and diolefins to parafins, which reduces gum formation in fuels. Hydroprocessing also cracks heavier products to lighter, more saleable products.

35

List of Refining AcronymsAGO – Atmospheric Gas OilATB – Atmospheric Tower BottomsB–B – Butane–Butylene FractionBBLS – BarrelsBPD – Barrels Per DayBTX – Benzene, Toluene, XyleneCARB – California Air Resource BoardCCR – Continuous Catalytic RegeneratorDAO – De–Asphalted OilDCS – Distributed Control SystemsDHT – Diesel HydrotreaterDSU – Desulfurization Unit EPA – Environmental Protection AgencyESP – Electrostatic PrecipitatorFCC – Fluid Catalytic CrackerGDU – Gasoline Desulfurization UnitGHT – Gasoline HydrotreaterGOHT – Gas Oil HydrotreaterGPM – Gallon Per MinuteHAGO – Heavy Atmospheric Gas OilHCU – Hydrocracker UnitHDS – HydrodesulfurizationHDT – HydrotreatingHGO – Heavy Gas OilHOC – Heavy Oil Cracker (FCC)H2 – HydrogenH2S – Hydrogen SulfideHF – Hydroflouric (adic)HVGO – Heavy Vacuum Gas OilkV – Kilovolt

kVA – Kilovolt AmpLCO – Light Cycle OilLGO – Light Gas OilLPG – Liquefied Petroleum GasLSD – Low Sulfur DieselLSR – Light Straight Run (Gasoline)MON – Motor Octane NumberMTBE – Methyl Tertiary–Butyl EtherMW – MegawattNGL – Natural Gas LiquidsNOX – Nitrogen OxidesP–P – Propane–PropylenePSI – Pounds per Square InchRBOB – Reformulated Blendstock for Oxygen Blending RDS – Resid DesulfurizationRFG – Reformulated GasolineRON – Research Octane NumberRVP – Reid Vapor PressureSMR – Steam Methane Reformer (Hydrogen Plant)SOX – Sulfur OxidesSRU – Sulfur Recovery UnitTAME – Tertiary Amyl Methyl EtherTAN – Total Acid NumberULSD – Ultra–low Sulfur DieselVGO – Vacuum Gas OilVOC – Volatile Organic CompoundVPP – Voluntary Protection ProgramVTB – Vacuum Tower BottomsWTI – West Texas IntermediateWWTP – Waste Water Treatment Plant

36

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. The words "believe," "expect," "should," "estimates," and other similar expressions identify forward–looking statements. It is important to note that actual results could differ materially from those projected in such forward–looking statements. For more information concerning factors that could cause actual results to differ from those expressed or forecasted, see Valero’s annual reports on Form 10-K and quarterly reports on Form 10-Q, filed with the Securities and Exchange Commission, and available on Valero’s website at www.valero.com.

Date post:	18-Oct-2014
Category:	Economy & Finance
View:	3,558 times
Download:	1 times

valero energy Benicia Refinery Tour – July 9, 2007

Economy & Finance