Result is a safer, more environmentally friendly, reliable and competitive operation

Since acquiring the Aruba refinery in March 2004, Valero Energy Corporation has invested nearly $360 million (640.8 million Afl.) to improve the safety, reliability, environmental performance and profitability of the plant. Most recently, the refinery commissioned a new 450-ton-per-day Sulfur Recovery Unit that has reduced SO2 emissions by nearly 90 percent, and revamped and restarted an idled Visbreaker Unit that has improved the refinery’s upgrading capacity and enabled it to process more refined products.

“We are very excited about the tremendous improvements that we’ve made to the refinery in just two years,” said Ray Buckley, vice president and general manager of the Valero Aruba Refinery.

“We have invested a significant amount of time and money to make the refinery safer and more environmentally friendly, reliable and competitive. What’s more, we have established a skills training program for local workers, offered scholarships for students, formed a Volunteer Council, created the Aruba Way campaign, and donated a significant amount of money to charities in the community.”

Investing to Improve the Refinery’s Operations

When Valero acquired the Aruba refinery, the company made much-needed reliability improvements to the two existing Sulfur Recovery Units, which resulted in a 40 percent reduction of the refinery’s SO2 emissions. To further improve environmental performance, the company recently invested $15.7 million (27.9 million Afl.) to construct

the new Sulfur Recovery Unit, reducing the SO2 emissions by a total of 90 percent. These units recover sulfur from the various refining processes – rather than allowing it to be released into the atmosphere.

Also to make the refinery more environmentally friendly, Valero improved storage tank maintenance, wastewater handling and coke handling; removed idle equipment; conducted soil remediation; and removed asbestos. The company is also evaluating plans to enclose the coke handling facility, which will eliminate the coke dust, and install coke-fired boilers, which will eliminate the smoke caused by burning pitch.

The Visbreaker Unit, which was shut down well before Valero acquired the refinery, was in need of revamping because of operational and safety issues. Valero was able to solve these issues by re-engineering the Visbreaker, making it more reliable and safe. This newly redesigned Visbreaker, which cost $55 million (97.9 million Afl.), allows the refinery to process an additional 30,000 barrels per day (BPD) of refined products.

Also this year, Valero is spending $45 million (80.1 million Afl.) to expand two Coker Units and another $50 million (89 million Afl.) to increase the refinery’s throughput capacity. New state-of-the-art coke drum de-heading devices, which are valves to control the opening and closing of the coke drums, are improving the safety and efficiency of these units. One of the cokers was retrofitted earlier this year and the other is scheduled to be upgraded this summer.

Improving Safety & Reliability

Since acquiring the refinery, Valero has significantly enhanced the plant’s reliability, which has in turn improved the plant’s safety and production levels. The refinery’s utilization rate was 74 percent at the end of 2005, nearly 20 percentage points higher than the 55 percent rate before the acquisition. Similarly, mechanical availability was 92 percent last year, versus 78 percent pre-acquisition.

In terms of safety, Valero has implemented best practices from the company’s other refineries, instituted new programs and policies, created a 24-hour emergency fire brigade, upgraded equipment and much more. The employee Total Recordable Incident Rate (TRIR), which is the industrywide measure of safety performance, was 1.1 last year – 280 percent better than 2003 (pre-acquisition) when it was 3.1.

Providing Skills Training to Local Workers

To develop the skills of local workers, Valero invested $1.1 million (1.95 million Afl.) to develop a two-year technical entry program, called “Let’s Grow Together” or “Ban Crece Hunto.” This program provides training and experience to prepare workers for a career in the refining industry. Valero gave approximately 100 Arubans the opportunity to work in the refinery and gain on-the-job experience during the recent turnaround (maintenance activity), and now those individuals are in a training program to learn one of five technical trades.

Also to provide opportunities for young people, Valero formed a scholarship program to provide 10 scholarships a year valued at $10,000 (17,800 Afl.) each to deserving students who wish to continue their education after high school. Not only are the children of Valero employees considered for these scholarships, but now all qualifying students on the island can apply for this educational assistance.

“These programs provide a tremendous benefit to the island,” Buckley said. “We are giving many Arubans the opportunity to further their education, secure good jobs and forge a brighter future. What’s more, we are improving the education level of the overall workforce in Aruba and we believe that is important to the economic development of the island.”

Donating Time & Money to the Community

To improve the community, Valero donated land for the development of a much-needed bus station in San Nicolas, and committed to invest $1 million (1.78 million Afl.) in improvements to the site.

Corporate contributions of approximately $500,000 (890,000 Afl.) are also made to worthy non-profit groups throughout the community each year. Most recently, Valero purchased a much-needed boat for the maritime police to help protect the coastline, and funded state-of-the-art radiology equipment for Centro Medico.

In 2005, the company and its employees contributed $337,401 (600,573 Afl.) to charity through the Aruba Way campaign, a unique fundraising effort that the company modeled after the United Way campaigns in the U.S. An additional $175,000 (311,500 Afl.) was donated to children’s charities through proceeds raised during the Valero Texas Open Benefit for Children Golf Classic.

In addition to all of these contributions, the Valero Volunteers worked more than 3,500 community service hours last year. The Valero Volunteer Council helped with various projects, such as helping with the restoration of the historic Alto Vista Chapel and renovating Centro di Barrio Lago Heights.

“Valero has invested heavily in our employees, refinery and community since acquiring the plant. Not only has this commitment made us a better refinery, it has made Aruba a better place to live, work and visit,” Buckley said.