Diamond Green Diesel’s SAF project in Port Arthur, Texas, progressing ahead of schedule

Photo: Diamond Green Diesel

Valero Energy reported in its first-quarter financials April 25 that the sustainable aviation fuel (SAF) project at the Diamond Green Diesel plant in Port Arthur, Texas, is progressing ahead of schedule.

Diamond Green Diesel is a joint venture between Valero and Darling Ingredients.

According to Valero, the SAF project is now expected to be operational in the fourth quarter of this year.

The total cost of the SAF project, half of which is attributable to Valero, is $315 million.

The project is expected to give the plant the optionality to upgrade approximately 50 percent of its current 470-million-gallon renewable diesel annual production capacity to SAF.

With the completion of this project, Valero said Diamond Green Diesel is expected to become one of the largest manufacturers of SAF in the world.

Valero also reported that its renewable diesel segment, which consists of the DGD joint venture, reported $190 million of operating income for the first quarter compared to $205 million for the first quarter last year.

Segment sales volumes averaged 3.7 million gallons per day in the first quarter of 2024, which was 741,000 gallons per day higher than the first quarter of 2023.

The higher sales volumes were due to the impact of additional volumes from the DGD Port Arthur plant, which started up in the fourth quarter of 2022 and was in the process of ramping up production rates in the first quarter of 2023.

Operating income in the first quarter of 2024 was lower than the first quarter of 2023 due to lower renewable diesel margins.

Valero’s refining segment reported operating income of $1.7 billion for the first quarter compared to $4.1 billion for the first quarter of 2023.

Refining-throughput volumes averaged 2.8 million barrels per day in the first quarter of 2024.

“We are pleased to report strong financial results for the first quarter despite heavy planned maintenance across our refining system,” said Lane Riggs, Valero’s president and CEO. “Our team’s ability to optimize and maximize throughput while undertaking maintenance activities illustrates the benefits from our longstanding commitment to safe and reliable operations.”

Riggs added, “We remain focused on the things that have been a hallmark of our strategy for over a decade—maintaining operating excellence, executing our projects well, discipline around capital investments, and our commitment to shareholder returns.”