Valero Energy Corp., San Antonio, Tex., commissioned and started production from Diamond Green Diesel Holdings LLC’s (DGD) 470-million gal/year renewable diesel and 20 million gal/year renewable naphtha plant at the operator’s 395,000-b/d refinery in Port Arthur, Tex. in fourth-quarter 2022.
Valero noted the development in its fourth-quarter 2022 earnings report Jan. 26.
DGD—a 50-50 joint venture of Valero Energy Corp. and Darling Ingredients Inc.—completed the project under budget and ahead of the original second-half 2023 schedule (OGJ Online, Feb. 8, 2021). Total annual DGD production capacity is now about 1.2 billion gal/year of renewable diesel and 50 million gal/year of renewable naphtha.
Valero Energy reported net income attributable to stockholders of $3.1 billion for fourth-quarter 2022, compared with $1.0 billion for the same quarter in 2021. Excluding adjustments, adjusted net income attributable to stockholders was $3.2 billion for the quarter, compared with $988 million for fourth-quarter 2021.
Renewable diesel
The renewable diesel segment, which consists of the DGD joint venture, reported $261 million of operating income for fourth-quarter 2022, compared with $150 million for fourth-quarter 2021. Segment sales volumes averaged 2.4 million gal/day in the quarter, which was 851,000 gal/day higher than fourth-quarter 2021. The higher sales volumes are attributed to the impact of additional volumes from the DGD St. Charles plant expansion and fourth-quarter 2022 startup of the DGD Port Arthur plant.
Refining
The refining segment reported operating income of $4.3 billion for fourth-quarter 2022, compared with $1.3 billion for fourth-quarter 2021. Adjusted operating income for the quarter was $4.4 billion, compared with $1.1 billion for fourth-quarter 2021. Refining throughput volumes averaged 3.0 million b/d in fourth-quarter 2022.
Refineries operated at a 97% capacity utilization rate in the quarter, which is the highest utilization rate for the company’s system since 2018, said Joe Gorder, Valero’s chairman and chief executive officer.
Ethanol
The ethanol segment reported $7 million of operating income for fourth-quarter 2022, compared with $474 million for fourth-quarter 2021. Adjusted operating income was $69 million, compared with $475 million for fourth-quarter 2021. Ethanol production volumes averaged 4.1 million gal/day in the quarter, which was 340,000 gal/day lower than fourth-quarter 2021.
Investing, financing
Net cash provided by operating activities was $4.1 billion in fourth-quarter 2022, including a $9 million unfavorable change in working capital and $142 million of net cash provided by operating activities associated with the other joint venture member’s share of DGD, excluding changes in DGD’s working capital. Excluding these items, adjusted net cash provided by operating activities was $4.0 billion.
Capital investments totaled $640 million in fourth-quarter 2022, of which $349 million was for sustaining the business, including costs for turnarounds, catalysts and regulatory compliance.
Valero returned 45% of adjusted net cash provided by operating activities to stockholders in 2022.
The company further reduced debt by $442 million in the quarter and ended 2022 with $9.2 billion of total debt, $2.4 billion of finance lease obligations, and $4.9 billion of cash and cash equivalents.
