Valero Puts $1.7B Port Arthur Project on Indefinite Hold
June 03, 2009
Valero Energy Corp. is indefinitely suspending a hydrocracker project at its Port Arthur refinery after announcing plans to acquire a 45-percent interest in a refinery in The Netherlands with similar capability.
It will cost thousands of hoped-for contractor jobs in Southeast Texas and dents the much-touted economic expansion in the region.
The San Antonio-based refiner said Tuesday it intended to acquire a 45-percent share of the TRN refinery in the Netherlands, which will cause the refiner to indefinitely postpone a hydrocracker project at the Port Arthur refinery.
It also puts on hold a similar project at the St. Charles, La., refinery that would have been worth $1.25 billion.
The Netherlands refinery includes a hydrocracker.
That moves puts on indefinite hold the $1.7 billion project for Port Arthur. The TRN refinery purchase price is $600 million.
"The hydrocracker projects remain something Valero would like to do in the long term, but we have taken them off our schedule for now and not yet rescheduled them," said Valero spokesman Bill Day in an email to The Enterprise.
"We have done engineering work for the projects and ordered equipment, so we will put the projects on hold and store the equipment until we have them rescheduled," Day said.
In October, Valero announced it would indefinitely postpone construction of a new coker planned for the Port Arthur refinery, Day told The Enterprise then.
At the same time, Day said Valero planned to delay the hydrocracker unit to coincide with completion of a pipeline, Day said.
The Port Arthur refinery will continue repairs to an existing coker, which removes sulfur from crude oil, Day said.
weaker earnings forecast for the second quarter is helping to lead a retreat in crude oil prices today.
Valero's stock price is off by about 15 percent in morning trades after opening at $22.38.
Source: McClatchy-Tribune Information Services
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