John Royall: Thank you.
Operator: Thank you. The next question is coming from Sam Margolin of Wolfe Research. Please go ahead.
Sam Margolin: Good morning. Thank you.
Joe Gorder: Good morning, Sam.
Sam Margolin: So in the prepared remarks, you mentioned European energy cost driving optimization opportunities in the US via a lot of different factors. But energy costs in Europe have crashed and diesel cracks are still rising and those optimization opportunities are still there. Can you talk a little bit about maybe what’s going on in Europe from your perspective that’s kind of sustaining these advantages even though the gas cost side is maybe out of the equation?
Lane Riggs: I’ll start and if Gary wants to sort of add. This is Lane, by the way, Sam. So natural gas still at the UK and really in the Netherlands is still nominally around $20 per million BTU. When comparing that today, sort of the Houston — I mean probably nominally three and change. So there’s still a significant difference between natural gas cost now. With that said, we’ll use our Pembroke refinery as a proxy. Natural gas really hasn’t driven our signals in over a year. And so I guess what I’m saying now we don’t have an SMR and we’re not — we don’t have a big hydrocracker, so we don’t have a lot of insight into how that flows through to their marginal economics on those units. But what I’m saying is it’s high natural gas prices. In Europe, at least for us, it hasn’t changed our signals, which is macro run max at our Pembroke refinery.
Sam Margolin: Okay. That’s really helpful. And then I guess just as a follow-on, it’s a little bit related, but it’s back to Port Arthur. I mean the coker is starting up at this high run rate, and you’ve got a new renewable diesel facility there that’s very cost advantage if for no other reason than just its integration with the refinery. So this is facility that’s probably the most valuable fuels complex in the world at this point, I would say. And I don’t even know what the question is, to be honest with you, but I’m just trying to get contribution to the system.
Lane Riggs: We like where you’re going, Sam.
Sam Margolin: Yes. I mean if it has — if it’s dragging up the entire Gulf Coast system with it because of optimization opportunities that it comes with, I mean, just sort of I guess, a plant level contribution would be helpful.
Lane Riggs: What was that last question?
Homer Bhullar: Contribution at the plant level?
Lane Riggs: Yes. We can’t really say that. We do appreciate your comments around it. I mean — if you think about what this coker does, at least, it reduces — well, heavy the refinery up and our intermediate purchases sort of if you think about our VGO comments will be down significantly. So the better integrates sort of vertically integrates that refinery and makes it way less sort of, as you said, it’s a very important asset. It makes us way less, I’d say, significantly less dependent on intermediates to fill out the refinery.
Joe Gorder: And then obviously, the renewable diesel plant, there is going to be very helpful. So you’re right, Sam, it’s a very valuable complex to us.
Sam Margolin: All right. Well, thanks so much. Have a great day
Joe Gorder: You too.
Operator: Thank you. The next question is coming from Paul Cheng of Scotiabank. Please go ahead.
Paul Cheng: Hey, guys. Good morning.
Joe Gorder: Good morning.
Paul Cheng: Can I go back into Port Arthur, mainly with the coker coming on stream, we understand that, I mean, one of the decisions behind is that you will allow you doing the turnaround, you can still won the facility. But during the long-term around period, how that impact Port Arthur in terms of the cruise lay of throughput and product yield?
Lane Riggs: So are you talking about the turnaround portion of it? Are you just–?
Paul Cheng: No, outside of it. I mean, we understand the turnaround Now, you have two coker.
Lane Riggs: That’s what I’ve alluded to a little bit–
Paul Cheng: But I’m more interested if it is not doing the turnaround, how the new coker addition will impact in terms of your , your product, yield and your overall throughput?
Lane Riggs: So, as I said to Sam, it’s — we’ll heavy up considerably. Today, we run some light and medium crudes. You’ll see us run significantly more heavy, maybe plus rate, probably over time. I’d looking back at the FID some, but it’s not as much as you would think. And in terms of distillate, that’s really the net product we make out of this, and it’s sort of a plus 15% to plus 25% depending on the crude die in terms of distillate. What it really is, is a reduction in feedstock purchases for us. In addition to like we said, it’s a turnaround efficiency.
Paul Cheng: Right. So, we assume that is a 55,000 barrel per day, so you will see incremental one of heavy and mediums to the tune of 150,000 barrels per day?
Lane Riggs: I’m sorry, Paul, can you repeat that?
Paul Cheng: Now, the coker, the capacity is 55,000 barrels per day. Should we assume we’re heavier up by about 150,000 barrels per day of the heavy and medium sour crude?
Lane Riggs: No, we’re not increasing 50,000 barrel per day. We’re heavying up. You’ll see our rates. I don’t normally go from — I don’t know if it’s public here, I got to be careful. We run anywhere from 340 to 360 today, 375, depending on the crude die. I think we could potentially go up plus 30 to plus 40 on crude depending on how heavy we are or light we are. So, that’s sort of what happens. And so then it just changes. When we do this all the time whenever we change our crude die, we sort of have to spot in intermediate purchases to finish our conversion units out. So, what will happen is we’ll reduce the amount of intermediate purchases depending significantly on the base and tuning the refinery between how heavy we are and how we’ll change sort of the how crude run rates. So, — but it’s not a plus 150,000.
Paul Cheng: No, no, I’m saying not the overall throughput increased by 150,000, I’m saying that, will you increase the run of heavy and medium sour crude by 150,000 barrels per day with this coker?
Joe Gorder: Will it increase?
