Exhibit 99.1
Delaware City Refinery Tour |
August 27, 2007 |
Agenda |
Basics of RefiningDesulfurizationHydrocracking |
Delaware City Refinery OperationsGasification OverviewQ&APlant TourConcluding Remarks2 |
Crude Oil Characteristics |
Crudes are classified and priced by density and sulfur contentCrude density is commonly measured by API gravity |
· API gravity provides a relative measure of crude oil density |
· The higher the API number, the lighter the crude Light crudes are easier to process Heavy crudes are more difficult to process |
Crude sulfur content is measured as a percentage |
· Less than 0.7% sulfur content = sweet |
· Greater than 0.7% sulfur content = sour |
· High sulfur crudes require additional processing to meet regulatory specs |
Acid content is measured by Total Acid Number (TAN) |
· Acidic crudes highly corrosive to refinery equipment |
· High acid crudes are those with TAN greater than 0.7 3 |
Crude Oil Basics |
Crude Quality by Types Estimated Quality of Reserves (2006) |
4.0%SOURCold Lake 3.5% Cerro Negro Maya WCS 3.0%CONTENTM-100 (resid) Arab HeavySweet |
2.5%High Acid |
Arab Medium20% |
(Sweet) |
DubaiLight/Medium |
SULFURNapo2% |
2.0% MarsSourIran Heavy Arab Light Ameriven-Hamaca2010 13%1.5%66% 2000UralsHeavy |
1990 Sour |
1.0% Alaskan North SlopeSWEET 1980 |
0.5% WTI |
Brent |
Tapis Cabinda Bonny Light 0.0% |
15 20 25 30 35 40 45 50 |
Source: Oil & Gas Journal, Company Information |
HEAVY API GRAVITY LIGHT |
Source: Industry reports NOTE: Red line represents the average crude quality by decade (actual and projected) |
Majority of global reserves are light/medium sourMost quoted benchmark prices are light sweet crudes |
· WTI (West Texas Intermediate), Western Hemisphere |
· Brent (North Sea Crude), Europe |
Historical trend shows global crude supply becoming heavier and more sour4 |
What’s in a Barrel of Crude Oil? Crude Types Characteristics Yields |
2005 U.S. |
3% > 34 API Gravity Production Light Sweet Crude 30% < 0.7 % Sulfur (e.g. WTI, Brent, Saharan Refinery 34%7%Blend) 35% Demand Gases Most Expensive 33% Gasoline RFG50%Conventional 3% CARB 24 – 34 API Gravity Medium Sour Crude 21% Premium |
> 0.7 % Sulfur |
(e.g. Mars, Arab Light, 26% Arab Medium, Urals) 50% Demand |
33%Distillate 50% Less Expensive Jet Fuel Diesel Heating Oil < 24 API Gravity 1% 14% Heavy > 0.7 % Sulfur 22%10%Fuel Oil & Heavy Sour Crude Other (e.g. Maya, Cerro Negro, Cold 15% Demand |
Lake, Western Canadian Select) 63%Source: EIA Refiner Production |
Least Expensive |
Refineries upgrade crude oil to higher value products5 |
Basic Refining Concepts |
Intermediates Final Products< 90°F Propane, Butane•Refinery fuel gas and lighter•Propane |
·NGLs 90–220°F Straight Run More |
Gasoline (low•Gasoline (high octane) octane) processing |
Crude oil |
220–315°F More•Gasoline (high octane) Naphtha Distillationprocessing•Jet fuel Tower (Crude•Kerosene Unit) 315–450°F More•Jet fuel Kerosene processing•Diesel Fuel oil More•Gasoline (high octane) 450–650°F Light Gas Oil Furnace•Diesel processing Fuel oil More•Gasoline (high octane) 650–800°F Heavy Gas Oil•Diesel Vacuum processing•Fuel oil Unit |
·Gasoline (high octane) 800+°F Residual Fuel More•Diesel Oil/Asphalt•Fuel oil processing |
Lube stocks6 |
Hydroskimming/Topping Refinery |
Crude Unit |
Propane/Butane 4%Propane/ Butane Gasoline |
Low Octane GasolineReformerHigh Octane GasolineRFG Towerand Naphtha 30%Conventional CARB HydrogenPremium Light DistillationHS Kerosene/Jet FuelDistillate |
LS Kerosene/Jet Fuel |
SweetDesulfurizer34%Distillate Crude Jet Fuel Diesel |
HS Diesel/Heating Oil LS Diesel/Heating Oil |
Heating OilVacuum Gas OilHeavy |
32%Fuel Oil &UnitOther |
Heavy Fuel Oil |
100% Total Yield |
Simple, low upgrading capability refineries run sweet crude7 |
Crude and Vacuum Towers |
Reactor |
Heater Crude Atmospheric Tower Vacuum Tower Reformer8 |
Medium Conversion: Catalytic Cracking |
Crude UnitPropane/Propane/Butane 8%Butane Gasoline ReformerRFGLow Octane Gasoline High Octane Gasoline 45%Conventionaland NaphthaCARB Tower Premium Hydrogen Distillate |
Light DistillationHS Kerosene/Jet Fuel LS Kerosene/Jet Fuel |
Desulfurizer27%Distillate Sour Jet FuelHS Diesel/Heating Oil LS Diesel/Heating OilDiesel Crude Heating Oil |
Light Cycle Oil |
(LCO) |
Alkylation UnitAlkylate |
Fluid CatalyticVacuumGas Oil |
Cracker |
Unit(FCC)FCC Gasoline |
Heavy24%Fuel Oil & Other |
Heavy Fuel Oil |
104% Total Yield |
Moderate upgrading capability refineries tend to run more sour crudes while achieving increased higher value product yields and volume gain9 |
High Conversion: Coking/Resid Destruction |
Crude Hydrogen PlantGas UnitPropane/Propane/Butane 7%Butane Gasoline RFG TowerLow Octane GasolineReformerHigh Octane Gasoline 58%Conventionaland NaphthaCARB Premium Medium/ DistillationHydrogenHeavy Distillate28%Distillate |
HS Kerosene/Jet Fuel LS Kerosene/Jet Fuel |
SourDesulfurizerJet Fuel Diesel CrudeHS Diesel/Heating Oil LS Diesel/Heating OilHeating Oil |
HydrocrackerHydrocrackate Gasoline Light Gas Oil Ultra Low Sulfur Jet/Diesel LCOAlkylation |
UnitAlky Gasoline |
Fluid Catalytic |
Medium Gas OilCracker (FCC) |
Vacuum |
FCC Gasoline |
Unit Heavy15%Fuel Oil & Delayed Other |
Heavy Fuel Oil Coke |
Coker |
108% Total Yield |
Complex refineries can run heavier and more sour crudes while achieving the highest light product yields and volume gain10 |
FCC and Hydrocracker Reactors |
Fluidized Catalytic Cracker |
Reactor Hydrocracker Reactors |
Main Column Regenerator11 |
Cokers |
Delayed Coker |
Superstructure holds the drill and drill stem |
Fluid Coker — Benicia while the coke is forming in the drum12 |
Conversion Economics |
U.S. Gulf Coast Refinery Margins |
30 25 20 15 |
l / B b $ 10 S U |
5 0 (5) |
(10) |
Jan-00 Jan-01 Jan-02 Jan-03 Jan-04 Jan-05 Jan-06 Jan-07 |
Arab Medium Hydroskimming LLS Cracking Maya Coking |
Need conversion capacity to capitalize on sour crude discounts |
· Hydroskim – Breakeven or moderate margins; High resid yield When margins are positive – increase crude runs When margins are negative – decrease crude runs |
· Cracking – Better margins; Lower resid yield |
· Coking – Best margins; Lowest resid yield Maximize heavy crudes 13 |
Desulfurization Basics |
Objective |
Remove sulfur from light products (gasoline or diesel) to meet air quality requirements for clean burning fuels |
Desulfurization Unit |
HC Desulfurized Light Products High Sulfur HC-S H2 HC-S |
Light HC-S H2 Products H2 Elemental Catalyst (HC-S) Sulfur Plant Sulfur |
HC-S HC-S•Agricultural H2S S S Pharmaceutical H2HC-S S S S2HHydrogen Unit H2 LEGEND LEGEND H H2 2HC : HC : Hydrocarbon HydrocarbonH2 1000 or less PSI;H2 : HydrogenH2 H2H2 : Hydrogen |
700 F or less |
SS :: Sulfur Sulfur 14 |
Hydrocracking Basics |
Objective |
Value added upgrading of high sulfur distillates to low sulfur gasoline and ultra low sulfur jet/diesel to meet air quality requirements for clean burning fuels |
Hydrocracking Unit HC Desulfurized Hydrocrackate Gasoline High Sulfur HC-S H2 HC-S |
HC-S H2 |
Distillate H2 H HC Desulfurized Ultra Low Sulfur Jet/Diesel |
2 (HC-S) H2 Catalysts H2 Elemental H2 HC-S H2 HC-S Sulfur PlantSulfur |
H2•Agricultural H2 H2S S S S•Pharmaceutical HC-S S |
2S SHHydrogen Unit H2 LEGEND LEGEND H2 H2HC : HC : Hydrocarbon HydrocarbonH2 1300+ PSI;H : HydrogenH2 H2H 2 : Hydrogen725 to 780 F2 |
SS :: Sulfur Sulfur 15 |
Andrew Kenner |
Vice President and General Manager Delaware City Refinery16 |
Valero Delaware City Refinery |
Built by Tidewater Oil Company in 1957Acquired by Valero in 2005Since commissioning, Valero and previous owners have made significant modifications and environmental upgradesTotal throughput of 191,000 bpdHigh conversion operation |
· 60%+ gasoline yield |
Staffed by more than 700 full-time employeesLocated on 5,000 acres, some of which is leased to local farmers, preserving our buffer zoneSeeking OSHA VPP Star Status 17 |
Delaware City Products and Crude Slate |
Typical Product Slate Typical Crude Slate |
Product BPD % Crude S % / API BPD % |
Gasoline 85,000 50 Arab Heavy 2.7 / 29 75,000 45 Distillates 65,000 38 M-100 2.7 / 16 45,000 26 Propane 7,500 4 Hamaca 1.6 / 26 35,000 20 Alkylate 5,000 3 Opportunity Crudes 15,000 9 6 Oils 4,500 3 Total 170,000 100 Benzene 1,500 1 Pet coke 1,900 1 Sulfur 300 < 1 Total 170,700 100 |
Provides approximately 70% of all gasoline sold in DelawareFlexible light-ends systemProduces petrochemical grade Benzene for sales into local market. 18 |
Delaware City Capital Investments |
$456 MM invested in capital improvements and $97 MM for turnaround maintenance at Delaware City since Valero’s acquisition |
· Major plant turnaround completed in 4Q05Fluid Coker Flue Gas Scrubber — $200 MM |
Fluid Catalytic Cracking Unit Flue Gas Scrubber — $200 MM |
Cracked Naphtha Hydrotreating Unit expansion project commissioned in 4Q05Sulfur Plant O2 enrichment and reliability projects — $25 MM |
Took over operations of Gasifier/Power Plant and have improved on-stream reliability and throughput dramatically |
Petcoke Destruction (TPD) 1,100 650 300 Motiva Premcor Valero19 |
Gasification Overview |
File: GASIF03.vsd by: MEL 5/15/98 |
Delaware City Plant Air Separation |
Coke Gasification Repowering Project Plant Gas Turbine Electric Power Oxygen Clean Syngas |
To Refinery Coke Steam To Sulfur Fluxant Water Refinery Removal Boiler To Feed Utility Raw Syngas Exhaust Gas Water Syngas Cooler Gasifier |
Heat Recovery Boiler Steam Generator Feed Water Slurry High Pressure Steam Slag Acid Gas |
Electric To Power Utility |
To Sulfur Sulfur Refinery |
Recovery Unit |
Existing Steam |
Steam To Turbine Refinery20 |
Appendix |
Delaware City Refinery Flow Diagram22 |
Map of Valero Refineries |
Quebec, Canada 215,000 bpd capacityBenicia, California |
· 170,000 bpd capacity |
Paulsboro, New Jersey 195,000 bpd capacityDelaware City, Delaware Wilmington, California• 210,000 bpd capacity |
· 135,000 bpd capacity |
McKee, Texas |
· 170,000 bpd capacity |
Memphis, Tennessee |
· 195,000 bpd capacityThree Rivers, Texas |
· 100,000 bpd capacity |
Ardmore, Oklahoma |
· 90,000 bpd capacity |
Corpus Christi, Texas |
Valero Marketing• 340,000 bpd capacityKrotz Springs, Louisiana |
Presence• 85,000 bpd capacitySt. Charles, Louisiana |
· 250,000 bpd capacity |
Houston, Texas |
· 130,000 bpd capacityPort Arthur, Texas Texas City, Texas |
· 245,000 bpd capacity• 325,000 bpd capacitySan Nicholas, Aruba |
· 275,000 bpd capacity Capacity shown in terms of crude and feedstock throughput 23 |
Major Refining Processes – Crude ProcessingDefinition |
· Separating crude oil into different hydrocarbon groups |
· The most common means is through distillation |
Process |
· Desalting – Prior to distillation, crude oil is often desalted to remove corrosive salts as well as metals and other suspended solids. |
· Atmospheric Distillation – Used to separate the desalted crude into specific hydrocarbon groups (straight run gasoline, naphtha, light gas oil, etc.) or fractions. |
· Vacuum Distillation – Heavy crude residue (“bottoms”) from the atmospheric column is further separated using a lower–pressure distillation process. Means to lower the boiling points of the fractions and permit separation at lower temperatures, without decomposition and excessive coke formation. 24 |
Major Refining Processes – Cracking |
Definition |
· “Cracking” or breaking down large, heavy hydrocarbon molecules into smaller hydrocarbon molecules thru application of heat (thermal) or through the use of catalysts |
Process |
· Coking – Thermal non–catalytic cracking process that converts low value oils to higher value gasoline, gas oils and marketable coke. Residual fuel oil from vacuum distillation column is typical feedstock. |
· Visbreaking – Thermal non–catalytic process used to convert large hydrocarbon molecules in heavy feedstocks to lighter products such as fuel gas, gasoline, naphtha and gas oil. Produces sufficient middle distillates to reduce the viscosity of the heavy feed. |
· Catalytic Cracking – A central process in refining where heavy gas oil range feeds are subjected to heat in the presence of catalyst and large molecules crack into smaller molecules in the gasoline and surrounding ranges. |
· Catalytic Hydrocracking – Like cracking, used to produce blending stocks for gasoline and other fuels from heavy feedstocks. Introduction of hydrogen in addition to a catalyst allows the cracking reaction to proceed at lower temperatures than in catalytic cracking, although pressures are much higher. 25 |
Major Refining Processes – Combination |
Definition |
· Linking two or more hydrocarbon molecules together to form a large molecule (e.g. converting gases to liquids) or rearranging to improve the quality of the molecule |
Process |
· Alkylation – Important process to upgrade light olefins to high–value gasoline components. Used to combine small molecules into large molecules to produce a higher octane product for blending with gasoline. |
· Catalytic Reforming – The process whereby naphthas are changed chemically to increase their octane numbers. Octane numbers are measures of whether a gasoline will knock in an engine. The higher the octane number, the more resistance to pre or self–ignition. |
· Polymerization – Process that combines smaller molecules to produce high octane blending stock. |
· Isomerization – Process used to produce compounds with high octane for blending into the gasoline pool. Also used to produce isobutene, an important feedstock for alkylation. 26 |
Major Refining Processes – Treating |
Definition |
· Processing of petroleum products to remove some of the sulfur, nitrogen, heavy metals, and other impurities |
Process |
· Catalytic Hydrotreating, Hydroprocessing, sulfur/metals removal – Used to remove impurities (e.g. sulfur, nitrogen, oxygen and halides) from petroleum fractions. Hydrotreating further “upgrades” heavy feeds by converting olefins and diolefins to parafins, which reduces gum formation in fuels. Hydroprocessing also cracks heavier products to lighter, more saleable products. 27 |
List of Refining Acronyms |
AGO – Atmospheric Gas OilkVA – Kilovolt AmpATB – Atmospheric Tower BottomsLCO – Light Cycle OilB–B – Butane–Butylene FractionLGO – Light Gas Oil |
BBLS – BarrelsLPG – Liquefied Petroleum GasBPD – Barrels Per DayLSD – Low Sulfur DieselBTX – Benzene, Toluene, XyleneLSR – Light Straight Run (Gasoline)CARB – California Air Resource BoardMON – Motor Octane NumberCCR – Continuous Catalytic RegeneratorMTBE – Methyl Tertiary–Butyl EtherDAO – De–Asphalted OilMW – MegawattDCS – Distributed Control SystemsNGL – Natural Gas LiquidsDHT – Diesel HydrotreaterNOX– Nitrogen OxidesDSU – Desulfurization UnitP–P – Propane–PropyleneEPA – Environmental Protection AgencyPSI – Pounds per Square Inch |
ESP – Electrostatic PrecipitatorRBOB – Reformulated Blendstock for Oxygen BlendingFCC – Fluid Catalytic CrackerRDS – Resid DesulfurizationGDU – Gasoline Desulfurization UnitRFG – Reformulated GasolineGHT – Gasoline HydrotreaterRON – Research Octane NumberGOHT – Gas Oil HydrotreaterRVP – Reid Vapor PressureGPM – Gallon Per MinuteSMR – Steam Methane Reformer (Hydrogen Plant)HAGO – Heavy Atmospheric Gas OilSOX– Sulfur OxidesHCU – Hydrocracker UnitSRU – Sulfur Recovery UnitHDS – HydrodesulfurizationTAME – Tertiary Amyl Methyl EtherHDT – HydrotreatingTAN – Total Acid NumberHGO – Heavy Gas OilULSD – Ultra–low Sulfur DieselHOC – Heavy Oil Cracker (FCC)VGO – Vacuum Gas OilH2 – HydrogenVOC – Volatile Organic CompoundH2S – Hydrogen SulfideVPP – Voluntary Protection ProgramHF – Hydroflouric (adic)VTB – Vacuum Tower BottomsHVGO – Heavy Vacuum Gas OilWTI – West Texas IntermediatekV – KilovoltWWTP – Waste Water Treatment Plant28 |
Safe Harbor Statement |
Statements contained in this presentation that state the Company’s or management’s expectations or predictions of the future are forward–looking statements intended to be covered by the safe harbor provisions of the Securities Act of 1933 and the Securities Exchange Act of 1934. The words “believe,” “expect,” “should,” “estimates,” and other similar expressions identify forward–looking statements. It is important to note that actual results could differ materially from those projected in such forward– looking statements. For more information concerning factors that could cause actual results to differ from those expressed or forecasted, see Valero’s annual reports on Form 10-K and quarterly reports on Form 10-Q, filed with the Securities and Exchange Commission, and available on Valero’s website at www.valero.com. |