Delek US Holdings is planning a major turnaround and upgrades at its 83,000 b/d Krotz Spring, La., refinery in the fourth quarter that company officials believe will result in higher yields.
In an earnings call on Tuesday, executives said they have also scheduled improvement projects at the company’s 74,000 b/d Big Spring, Texas, refinery and 85,000 b/d El Dorado, Ark., refinery.
Delek has allocated $115 million for regular maintenance and upgrades to a fluid catalytic cracking unit and crude unit at Krotz Spring, Joseph Israel, executive vice president of operations, told analysts.
He said the Krotz Spring projects should provide returns of $30 million/year in yield and rate flexibility improvements. The work will include crude unit piping, an FCC reactor upgrade, optimizing reformer catalyst and energy efficiency improvements.
The Big Spring refinery work, scheduled for 2024-2025, is expected to improve the facility’s throughput by 5,000 b/d and increase its capture rate to 70%, the company’s executives said. Capture rate is a measure of a refiner’s margins compared with an industry benchmark.
At the El Dorado facility, the company said in an investor presentation that the work, also set for 2024-2025, will include commercial optimization projects such as crude oil sourcing expansion, pipeline sales upgrade and expanding asphalt quality netback.
Delek said it plans to invest $220 million in its refining segment this year, with 93% of that directed to “sustaining and regulatory projects” and the remaining 7% earmarked for work that will boost efficiency and yields.
The bulk of the money will be spent on the Krotz Spring turnaround and capture rate improvements at Big Spring, the company added.
In addition to owning four U.S. oil refineries, Delek operates midstream, retail and renewable fuel assets.
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--Reporting by Frank Tang, [email protected]; Editing by Jeff Barber, [email protected]
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