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SAN ANTONIO — Valero Energy Corp., the nation's largest independent refiner, said Tuesday it will close an unprofitable portion of a Delaware refinery, laying off at least 150 employees and 100 contract workers.
Valero's subsidiary, the Premcor Refining Group Inc., is closing the coking and gasifier complex at the Delaware City refinery, which process a particular type of heavy crude oil and petroleum coke.
The rest of the refinery will remain open, company spokesman Bill Day said.
The gasifier complex should be shut down indefinitely by the end of September while the coker operation will be closed by early to mid-October until economics improve.
Both operations had been unprofitable because of a decreased price differential between heavy sour and light sweet crude oil, the company said.
The closures will cut costs and allow the refinery to process a lighter crude slate and shift production to higher margin products, said Bill Klesse, chairman, president and chief executive officer.
"These moves, while difficult, are necessary to improve the profitability of Valero's refining system," he said in a statement.
The job losses emphasize the need to create jobs in Delaware and grow the state's economy, according to Joe Rogalsky, a spokesman for Delaware Gov. Jack Markell.
"It's not just numbers. These are real people, real families that are being affected," he said.
It is the second time in as many weeks that Valero has closed an operation as it pushes to improve profitability. The earlier announcement was to close an Aruba refinery for an extended period and with the release of more than 700 contract workers in September.
The Aruba refinery had been shuttered since mid-July as falling prices for its refined products made the plant less profitable.
The company plans to report special charges in the third quarter related to the closures, which will include asset impairment, employee costs and asset retirement obligations.
Valero in July said it could lose money for the rest of the year if the weak economy persists.
Shares of Valero rose 39 cents, or 2.1 percent, to close at $18.75 a share.
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AP Business Writer Randall Chase in New Castle, Del., contributed to this report.
