Valero Energy Defers, Cancels Projects at Refineries (Update1) By Robert TuttleOct. 28, 2008 (Bloomberg) — Valero Energy Corp., the largest U.S. refiner, said it will cancel or defer projects at several refineries to cut costs by about $500 million or 17 percent. The company canceled a coker project and delayed to 2011 from 2010 a hydrocracker project at the Port Arthur, Texas, refinery, Chief Operating Officer Rich Marcogliese said today on an earnings conference call. A paraxylene production project has been scrapped at the company’s St. Charles, Louisiana, plant. Valero said it’s spending on capital and maintenance is expected to total $3.5 billion in 2009, down from a previous estimate of $4 billion. U.S. refiners have seen profit margins on gasoline narrow as demand slumps. Plans to revamp the fluid catalytic cracker at the Memphis, Tennessee, refinery have been rescheduled to 2011 from 2009, Marcogliese said. A Quebec-to-Montreal fuel pipeline as well as upgrades to the Quebec refinery, including a new sulfur plant and propane de-asphalter, will be delayed until some time in the next five years. Gasoline purchases in the U.S. were down 6.4 percent from a year earlier in the week ended Oct. 24, according to MasterCard Inc.’s SpendingPlus report. To contact the reporter on this story: Robert Tuttle in New York at rtuttle@bloomberg.net
