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Delek US Holdings Refinery Upgrades

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Delek US Holdings has announced a significant overhaul and enhancement plan for its 83,000 b/d Krotz Spring, La., refinery in the upcoming fourth quarter. The company’s officials are confident that these upgrades will lead to higher yields for the refinery.

Improvement Projects Across Refineries

During an earnings call, executives revealed that improvement projects are also scheduled for Delek’s 74,000 b/d Big Spring, Texas, refinery, and 85,000 b/d El Dorado, Ark., refinery.

Joseph Israel, Executive Vice President of Operations, shared that Delek has set aside $115 million for regular maintenance and upgrades at the Krotz Spring facility. The projects will focus on enhancing a fluid catalytic cracking unit and crude unit, with expected returns of $30 million/year in yield and rate flexibility improvements. The scope of work includes crude unit piping, an FCC reactor upgrade, reformer catalyst optimization, and energy efficiency enhancements.

Future Enhancements and Investments

The upcoming improvement project at the Big Spring refinery in 2024-2025 aims to increase throughput by 5,000 b/d and raise its capture rate to 70%. Delek’s executives highlighted that the capture rate will be a key metric for evaluating margins against industry standards.

Similarly, at the El Dorado facility, slated for enhancement in 2024-2025, commercial optimization projects will be undertaken. These include expanding crude oil sourcing, upgrading pipeline sales, and enhancing asphalt quality netback.

Strategic Investment Approach

Delek has set a plan to invest $220 million in its refining segment this year, with a focus on sustaining and regulatory projects accounting for 93% of the allocation. The remaining 7% will be dedicated to initiatives aimed at improving efficiency and increasing yields.

The majority of the investment will go towards the Krotz Spring turnaround and capturing rate enhancements at the Big Spring refinery.

Diversified Presence in the Energy Sector

Apart from owning four U.S. oil refineries, Delek also operates midstream, retail, and renewable fuel assets as part of its diversified energy portfolio.

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