Skip to comments.Valero refinery revived on Eagle Ford crude
Posted on 03/08/2013 7:05:59 AM PST by thackney
Valero Energy Corp.s refinery in Three Rivers was headed for mothballs a few years ago.
The refinery had to purchase foreign crude on the Gulf Coast and move it inland for processing an inefficient and expensive process.
Three years ago, Three Rivers was a marginal refinery, said Harry Wright Jr., the plants manager, who spoke Thursday at the Eagle Ford Consortiums annual conference at the Grand Hyatt. It was likely to be shut down.
Now that it sits in the middle of the Eagle Ford Shale, the enormous South Texas oil and gas field opened up by shale drilling, Wright called the plant a crown jewel.
Capable of processing 100,000 barrels of crude per day, the refinery is located 70 miles south of San Antonio.
Instead of purchasing 90 percent of its crude oil from foreign sources, the Three Rivers refinery gets 90 percent of its crude from the Eagle Ford.
That gives the plant a secure future stretching at least 10 to 20 years in the future, Wright said, even as it confronts some of the headaches that come with an oil boom no place to house its summer interns and turnover as some of its own employees leave for jobs with the companies that are drilling for oil.
The plant has 140 operators, and Wright said the plant has hired 60 new ones in the last few years. Many of the remaining workers are approaching retirement age.
Restaurants and gas stations advertise positions that start at $12 an hour. Even the local Dairy Queen offers a signing bonus, Wright said, calling the hiring environment very, very challenging.
Residents also are dealing with increased traffic accidents. Theres people dying about every three days on the roads, Wright said.
Along with abundant jobs and a historic level of corporate investment, the region is coping roads torn apart by heavy truck traffic, a housing shortage and infrastructure strained in every imaginable way.
Marathon Oil Co. CEO Clarence Cazalot Jr., who gave the keynote presentation at the conference, said that 9-1-1 calls have doubled in many South Texas communities.
And the issues are likely to be around for a while as oilfield activity continues ramping up.
Cazalot said he considers the Eagle Ford the best unconventional oil field in North America, and probably the entire world.
The fact that I stand here today and say that is really amazing, Cazalot said.
Marathon alone plans to invest at least $1.8 billion per year for the next five years in the Eagle Ford, and this year will dedicate about one-third of its global spending to South Texas.
Cazalot said the Eagle Ford is part of a broader trend, as the crude oil produced from shale fields displaces foreign imports. He noted that China is now the worlds biggest importer of oil not the U.S.
On a global stage, this is a game changer, Cazalot said.
He said more pipelines have been built across South Texas, helping eliminate some truck traffic. Marathon can now transport about 60 percent of its product by pipe, while a little more than a year ago everything had to move by truck. Its also reduced its water use by 45 percent per well, which means fewer water trucks on the road.
Stephen McNair, midstream manager for Pioneer Natural Resources, said its been a frontier expansion in the Eagle Ford for Pioneer and other operators, who have had to quickly build pipelines and gas processing plants to handle the increase in production.
Danny Brown, general manager of Anadarko Petroleums Maverick Basin, which includes its Eagle Ford operations, said the company has about 500 producing wells in the field but about 2,500 wells left to drill.
This is one of Anadarkos cornerstone assets, he said.
County Judge Nelson Wolff was among several elected officials who said the industrys intense focus on the region may be the best chance for oil field communities to secure state funding for damaged roads and other problems.
Its our one great chance to demand the state pay greater attention to South Texas, Wolff said.
About 800 people are attending the Eagle Ford Consortiums conference, which runs through Friday.
The refinery is capable of producing a wide variety of products including gasoline, diesel fuel, jet fuel, benzene, toluene, xylene, liquefied petroleum gases (LPGs), propylene, No. 6 fuel oil, fuel gas and sulfur. Due to the proximity of the Eagle Ford Shale formation, the refinery receives mostly local crude by trucks and pipelines. The finished products are mainly shipped by pipeline to the San Antonio terminals. The refinery also produces naphthenic lubricants/specialty process oils.
I thought Valero was owned by the late Chavez . . . is this true?
Absolutely False. Valero is a Texas Company.
Named for the mission San Antonio de Valero the original name of the Alamo Valero Energy Corporation was created on Jan. 1, 1980, as the corporate successor to LoVaca Gathering Company, a subsidiary of the Coastal States Gas Corporation. Valero is the direct result of a $1.6 billion settlement approved unanimously in 1978 by the Texas Railroad Commission, the states natural gas regulatory agency, which ended more than six years of litigation brought against Coastal by its municipal gas customers who claimed they had been overcharged for natural gas.
Valeros natural-gas transportation business diversified in the mid-1980s when the company purchased a 50 percent interest in a Corpus Christi, Texas, refinery owned by Saber Energy. The operation began as nothing more than a vacuum unit and crude unit on a humble plot of land near the Corpus Christi Ship Channel. But in the years that followed, Valero assembled its Refinery of the Future, and through its subsidiaries added more refineries starting in 1997, operating 16 plants today. Through these acquisitions, the company also branched into retail and wholesale markets and continues to operate under the Valero, Diamond Shamrock, Shamrock and Beacon brands in the United States and the Caribbean; Ultramar in Canada; and Texaco in the United Kingdom and Ireland.
Today, Valero proudly has a workforce of 22,000 employees and maintains a refining throughput capacity of 3 million barrels per day, making it the world’s largest independent refiner — tops among refiners that don’t also drill for oil. The company ranks No. 12 on the current Fortune 500 list, and is still based in its hometown of San Antonio. Valero is also a leading ethanol producer with 10 ethanol plants in the Midwest and a combined production of 1.2 billion gallons per year. Valero also operates a 33-turbine wind farm near its McKee Refinery in Sunray, Texas.
Valero > Our Business > Company History
No. Citgo was the company owned by Chavez.
You are confusing it with Citgo.
I believe that would be Citgo.
I think the author of what we're remembering confused CITGO with VALERO.
They are using our product to do their crude blending.
Do you produce Eagle Ford Crude?
I stand corrected. So when will Chavez's coffin tour the U.S. to all the Citgo Stations?
This internet myth was started in '06 by Debbie Schussel, and has been compounded by business decisions since then.
Valero bought old refineries from Citgo, naturally many concluded that the it was just a name change.
And many chains, including 7-11, saw declining sales under Citgo and did not renew contracts with them. Many then signed contracts with Valero, again many said "Aha - name change."
A couple years ago I heard the myth, did some research, and learned Valero has no corporate connection to Citgo or Venezuela.
Probably real soon.
There’s a big fuss going on in Houston that the Citgo offices are flying the US Flag, the Texas Flag, and the Venezaula flag all at half-mast.
No, the equipment.
This would be an occasion calling for mass public urination.