Valero Energy has announced the impending closure of its Benicia and Wilmington refineries in California as the company faces a tough regulatory environment and escalating costs.
The announcement was made as part of the company’s first quarter 2025 (Q1 2025) results. The company posted a net loss attributable to Valero stockholders of $595m in Q1 2025, compared with a net income of $1.2bn in Q1 2024.
The Benicia refinery, with a capacity of 170,000 barrels per day (bpd), and the Wilmington refinery, with a throughput capacity of 135,000bpd, will cease operations by the end of April 2026.
In late March, Valero approved plans to either idle, restructure or shut down the Benicia refinery following concerns over California’s dwindling fuel supplies and soaring gasoline prices.
The strategic review of the company’s remaining operations in the state has led to the evaluation of the Benicia and Wilmington refineries for impairment.
Consequently, Valero has recorded a pre-tax impairment of $1.1bn related to these assets.
Valero executive vice-president Rich Walsh was quoted by Reuters as saying during a call with analysts: “Our current intent is to close the refinery. We have already had meetings with the CEC (California Energy Commission) and are working with them to minimise the impacts that would result from the loss of the refinery.”
The Benicia refinery, situated north-east of San Francisco, processes various feedstocks into fuel products such as CARBOB and CBOB gasolines, CARB diesel, diesel, jet fuel and asphalt.
It employs more than 400 individuals and features a cogeneration system capable of generating 50MW of power, which is recycled into the refining process.
The Wilmington refinery near Los Angeles is connectedby pipeline to marine terminals and associated dock facilities associated with the moving and storage of crude oil and other feedstocks.
With approximately 390 employees, the refinery produces a significant portion of Southern California’s asphalt and other fuel products.
Both refineries play a substantial role in California’s fuel supply chain, with the Wilmington refinery contributing 15% of the asphalt supply in Southern California.
