UPDATE 1-Hovensa to cut St Croix plant rates as shuts units
* Crude throughput to be reduced by 150,000 bpd
* Heating oil and diesel markets to be impacted
(Updates with quote, details)
NEW YORK, Jan 26 (Reuters) - Hovensa LLC said on Wednesday it will reduce its crude oil processing capacity at its 500,000 barrel-per-day St. Croix refinery in the U.S. Virgin Islands by 150,000 bpd as it permanently closes older, less efficient units by the end of the first quarter.
Hovensa Interim Chief Operating Officer John W. George said the move was an important step toward improving the refinery's performance at a time when Hovensa and the refining industry are facing difficult economic conditions.
"Simplifying our operation by eliminating some older, smaller process units is expected to result in improved efficiency, reliability and competitiveness," George said in a statement.
The company said the refinery's gasoline-making fluid catalytic cracker and coker will not be impacted by the reconfiguration.
New York Harbor cash products traders said that this move will likely reduce the amount of distillates, including diesel and heating oil, available in the market.
Additionally, a supply reduction in gasoline blending component reformate was expected.
Since the refinery reconfiguration will not be complete until the end of the first quarter, traders said there was little to no immediate impact on the oil products markets.
Hovensa is a joint venture between Hess Corp (HES.N: Quote) and Venezuela's state oil company PDVSA. (Reporting by Jeffrey Kerr; Additional reporting by Naveen Arul in Bangalore; Editing by Marguerita Choy)
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