Valero To Turn Refinery Into Crude and Product Terminal

Valero suspended refining operations at the plant in March

Valero Energy Corporation [NYSE:VLO] subsidiary Valero Refining Company-Aruba N.V. (Valero) said in a press release today it is to turn its Aruba refinery into a refined products terminal.

"We believe that Aruba has the assets to compete as a world-scale crude and refined products terminal," said Valero Chairman and CEO Bill Klesse.

"With both deepwater berths and smaller berths, the terminal will have the flexibility to load the very largest crude ships. In addition, the scale and mixture of tankage will permit commercially attractive storage opportunities for our customers," he added.

Valero said the change will "require a considerably smaller workforce" but the company would "continue to be a significant employer in Aruba", with the reduction in staff and business reorganisation all expected to be complete before the end of 2012.

The company said it will continue to supply diesel and fuel oil to the island, as well as engaging in third-party terminal services, make facility improvements, and dock and tankage upgrades.

Valero said it suspended refining operations at the plant in March and has maintained the refinery in a state that would allow a restart, something it will continue "in the near term" should the firm be successful in finding alternatives for the refinery prior to the transition to terminal operations.

"Our discussions with interested parties, including those facilitated by the Government of Aruba, will continue, and if successful may result in the suspension of the workforce reduction. We greatly appreciate the continued efforts and support from the Prime Minister and his government," said Klesse.