Valero Energy Corp. said it will convert its refinery in Aruba to a fuel terminal, a transformation that will result in an undisclosed number of job cuts.
Valero said Monday it is still looking to sell the refinery, which is ready to re-start if a buyer can be found before it begins the transformation. The plant was idled in March.
Refineries in the Caribbean and on the East Coast of the U.S. have struggled in recent years because the crude oil they use has been priced higher than the oil available to refiners in the middle of the U.S. Growing oil production in North Dakota and Canada and lower gasoline demand in the U.S. have boosted crude oil supplies in the middle of the U.S. and lowered prices relative to most world oil prices.
U.S. refiners also have access to some of the cheapest natural gas in the world, helping them to lower their production costs. Natural gas is burned to help cook crude oil into gasoline, diesel, jet fuel and heating oil.
Earlier this year Hess Corp. shut its Hovensa refinery in St. Croix, U.S. Virgin Islands.
Production from Caribbean and East Coast refiners has been supplanted by fuels exported from the U.S. U.S. refiners exported a record amount of refined fuels last year, and they are on track to export even more this year.
San Antonio-based Valero’s Aruba refinery will become a storage and shipping facility for refined petroleum products. The reorganization and reduction in workforce will be complete before the end of 2012, the company said.