Valero Energy Corp. had net income of $1.9 billion for second-quarter 2023, compared with $3.1 billion in this year’s first quarter and $4.7 billion in second-quarter 2022.
Net cash provided by operating activities was $1.5 billion in the quarter. Included was a $1.2 billion unfavorable change in working capital and $242 million of adjusted net cash provided by operating activities associated with Darling Ingredients share of DGD, excluding changes in DGD’s working capital. Excluding these items, adjusted net cash provided by operating activities was $2.5 billion in second-quarter 2023.
Capital investments totaled $458 million in the quarter.For the quarter, the company’s refineries had throughput capacity utilization of 94%, in line with first-quarter’s 93% capacity utilization and 94% capacity utilization for second-quarter 2022 (OGJ Online, July 9, 2022).
The company’s refining margin fell to $4.2 billion in the quarter compared with $5.9 billion in this year’s first quarter and $8.1 billion in the prior year’s second quarter.
The refining segment had operating income of $2.4 billion for the quarter, compared with $6.2 billion for second-quarter 2022. Refining throughput volumes averaged 3 million b/d in this year’s second quarter, flat with second-quarter 2022.
The renewable diesel segment, which consists of the Diamond Green Diesel joint venture (DGD), had operating income of $440 million, compared with $152 million for second-quarter 2022. Segment sales volumes averaged 4.4 million gal/d (gpd) in the quarter, which was 2.2 million gpd higher than second-quarter 2022. The higher sales volumes were due to the impact of additional volumes from the startup of the DGD Port Arthur plant in fourth-quarter 2022.
The ethanol segment had operating income of $127 million for the quarter, compared with $101 million for second-quarter 2022. Ethanol production volumes averaged 4.4 million gpd in second-quarter 2023, which was 582,000 gpd higher than second-quarter 2022.
The company expects capital investments attributable to Valero for 2023 to be about $2 billion, which includes expenditures for turnarounds, catalysts, and joint venture investments.
In this year's third quarter, the company expects refining throughput volumes to fall within the following ranges: Gulf Coast at 1.77-1.82 million b/d. midcontinent at 450,000-470,000 b/d, West Coast at 240,000-260,000 b/d, and North Atlantic at 435,000-455,000 b/d.
Operations
The Port Arthur Coker project, which commenced operations in April, is operating at full capacity (OGJ Online, Apr. 28, 2023). The new coker has increased the refinery’s throughput capacity and enhanced its ability to process incremental volumes of heavy crudes and residual feedstocks, while also improving turnaround efficiency.
The Sustainable Aviation Fuel (SAF) project at the DGD Port Arthur plant is on target to be completed in 2025 at an estimated cost of $315 million, with half of that attributable to Valero. The project is expected to give the plant the ability to upgrade about 50% of its current 470 million gal/year renewable diesel production capacity to SAF (OGJ Online, Feb. 1, 2023).
