HOUSTON (Reuters) - U.S. refiner Valero Energy Corp said on Thursday it plans to run its 14 refineries up to 98 percent of their combined throughput capacity of 3.1 million barrels per day (bpd) during the fourth quarter of 2018.
Valero’s refineries ran at 99 percent of their combined refining capacity in the third quarter, far ahead of the same period in 2017, when five U.S. Gulf Coast refineries were shut due to Hurricane Harvey.
John Locke, vice president of investor relations, said during a Thursday conference call to discuss third quarter earnings that the company expects its cost in 2018 for renewable identification number (RIN) biofuel credits will be about half of what it paid in 2017.
Valero expects to pay between $450 and $550 million in 2018. Biofuel blending, mostly for RINs, in 2017 cost $942 million.
Valero plans to begin construction on a $975 million, 55,000 bpd coker at its 335,000 bpd Port Arthur, Texas, refinery, said Lane Riggs, executive vice president and chief operating officer.
The construction is scheduled to finish is 2022, Riggs said. The new coker is set to increase reliability at the refinery, which has only one coker now. The addition of a second coker will allow it to keep running at high production levels when one coker needs to be shut for planned maintenance or repairs.
Cokers convert residual crude oil into feedstock for motor fuels and petroleum coke, a coal substitute.
Reporting by Erwin Seba, Editing by Rosalba O'Brien