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$VLO and $MMP announced the expansion of marine storage facility currently under construction in Pasadena, Texas. The facility is to be owned by a limited liability company that is owned 50/50 by $MMP and Valero Terminaling and Distribution Company, an arm of $VLO. The two-phase expansion, to be funded equally by both, costs approx. $820MM.
V-Tex Logistics, LLC, an indirect subsidiary of $VLO, agreed with Magellan Pipeline Co., an indirect unit of $MMP, to jointly build about 135-mile, 16-inch products pipeline from Houston to Hearne, Texas. Also, $VLO will separately build a terminal in Hearne, a terminal in Williamson County, Texas, and pipeline connecting the two terminals.
Valero Marketing and Supply de Mexico, a subsidiary of $VLO, inked long-term deals with Infraestructura Energetica Nova (IEnova) to import refined products at Port of Veracruz. It has contracted with IEnova to use 3 upcoming terminals at Veracruz, Puebla and Mexoci City for the purpose. Valero can acquire a 50% interest in each of the terminals.
$VLO clarified that the California Attorney General filed suit against a proposed acquisition by $VLO’s subsidiary of two petroleum storage and distribution terminals owned by a subsidiary of $PAA. Erroneous reports said the AG filed suit to prevent a merger between $VLO, Valero Energy Partners LP, and $PAA. This motion has been denied in court.
Going forward, $VLO estimates that the demand in U.S. is going to continue to grow. For the next five to ten years, the company forecasts a slight decline in gasoline demand in the U.S., which will be determined the economic activity. $VLO added that it will look for opportunities to increase its market presence in different international markets.
Valero remains on track to invest $2.7Bil of total capital in FY17, consisting of $1.1Bil for growth projects and $1.6Bil for sustaining the business, the company said as it posted 1Q17 results. $VLO exported a total of 365,000 barrels per day of gasoline and diesel during the first quarter.
In 1Q17, $VLO's capital investments totaled $641MM, of which $245MM was for turnarounds and catalyst. The company generated $988MM of net cash from operating activities. Valero ended 1Q17 with $8.5Bil of total debt and $4.5Bil of cash and temporary cash investments. The debt to capital ratio, net of $2.0Bil in cash, was 24%.
$VLO posted a drop in attributable net income of $305MM or $0.68 per share for 1Q17, compared to $495MM or $1.05 per share a year ago. Total operating revenues were $21.77Bil, vs. last year's $15.71Bil. The refining segment reported $647MM of operating income, down from $915MM. The ethanol segment operating income dropped to $22MM from $39MM.
Petroleum refining and marketing company $VLO reported 23% rise in its 4Q16 earnings, helped by higher revenues. Net income was $367MM, or $0.81 per share, compared to $298MM, or $0.62 per share during 4Q15. Operating revenues rose 10% YoverY to $20.7Bil. Excluding items, $VLO earned $0.817 per share.