Visibility to Growth and Disciplined Capital Management
.
Valero is Well Positioned for IMO 2020
Expected Impacts to Crude and Products
Global sulfur cap on marine fuels drops from 3.5 wt% to
0.5 wt% beginning January 1, 2020
Sour crude oil and resid discounts expected to widen as low
complexity refineries switch to sweeter crude and
feedstocks
Consultants expect diesel demand to increase 1 to 2+
MMBPD between 2019 and 2020 in addition to base annual
demand growth of 300 to 500 MBPD
-
Distillate cracks expected to strengthen while high sulfur
fuel oil discounts widen
Gasoline cracks expected to improve as low sulfur
vacuum gasoil feedstocks compete with other
blendstocks into bunker fuel and refiners maximize
distillate production
Peer-Leading Conversion
Capacity (1) Expected to Maximize
Distillate Upgrading
Peer Range
Median
30%
30%
k
Valero
I
22%
14%
(1) Source: EIA data as of January 1, 2019 and Valero analysis. Conversion capacity as a percentage of CDU capacity. Conversion capacity includes delayed coking, fluid coking,
gasoil hydrocracking, and residual hydrocracking. Peer group includes PSX, MPC, HFC, and PBF.
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