Vertex: Supply issues impact throughput volumes at Mobile refinery
Vertex Energy, Inc. said it expects lower than expected throughput volumes at its Mobile, Alabama, U.S.A., refinery in the third quarter of 2022. Based in Houston, Texas, U.S.A., Vertex owns a refinery in Mobile with an operable refining capacity of 75,000 barrels per day (BPD) and more than 3.2 million barrels of product storage, positioning it as a leading supplier of fuels in the region.
Vertex Energy purchased the Mobile Refinery and associated co-located logistics infrastructure, including product racks, an associated dock, and the Blakeley Island Terminal, from Shell in 2021. The transaction closed in 2022 for USD75 million in cash plus the value of the hydrocarbon inventory and other closing adjustments and accrued liabilities.
Vertex Energy said the reduced throughput volume from 72,000 to 74,000 BPD to 68,000 to 69,000 BPD is a result of “management’s decision to accelerate significant planned maintenance following recent and temporary crude supply issues.”
These supply issues resulted from third-party disruptions, impacting Vertex’s supplier’s ability to fulfill its contracted supply mandate for water-borne crude oil, which has been resolved.
Operating expense per barrel for the third quarter of 2022 is estimated to be approximately USD4.25-4.50 per barrel. Total capital expenditures are estimated to remain at USD30-35 million, for the third quarter of 2022, as previously announced.
In response to the reduced access to contracted crude supply volumes, Vertex accelerated and completed maintenance on one of its crude oil distillation units (CDU), as well as a catalyst change on its distillate and reformer units, a significant future planned turnaround event, typically performed every four years, which originally had been planned for the first quarter of 2023.
This decision, along with other minor facility maintenance operations completed during the period, helps to ensure optimal facility performance and enhance yields and maximum refinery throughput capacity, ahead of the anticipated heating oil demand season, together with projected robust product economics for the fourth quarter of 2022 and first quarter 2023, the company said.
All aforementioned third-party supply issues have since been resolved, and all maintenance was completed safely, on time, and within budget. The company expects to return to the refinery’s stated operational capacity by the first week of October.
“The unanticipated disruption to our contractually mandated supply of crude oil, while negatively affecting third quarter throughput volumes, has once again proved our team’s ability to respond to adverse events in a way that maximizes operational flexibility and economic value,” said Benjamin P. Cowart, president and CEO of Vertex.