Hess 2007 Annual Report Download - page 11

Marketing and Refining
REFINING
Our HOVENSA refinery in the United States Virgin Islands
is one of the largest refineries in the world. It is jointly
owned by the company and Petroleos de Venezuela S.A.
(PDVSA). The facility is strategically positioned and enjoys
strong economies of scale.
The refinery has 500,000 barrels per day of crude distillation
capacity and a 150,000 barrel per day fluid catalytic cracking
unit (FCC), which allows it to make significant volumes of
high-quality gasoline and distillates. In addition, the refinery
has a 58,000 barrel per day delayed coking unit, which
enables the refinery to process lower-cost heavy crude oils.
Gross crude runs at the refinery averaged 454,000 barrels
per day in 2007 versus 448,000 barrels per day in 2006.
Our Port Reading, New Jersey FCC facility located in
New York Harbor produces gasoline and fuel oil primarily
for markets in the Northeast. The facility averaged
feedstock runs of about 61,000 barrels per day in
2007 versus 63,000 barrels per day in 2006.
In 2007, both refineries operated reliably, other than a
short period of unplanned downtime at the Port Reading
refinery in the first quarter. During the year, the HOVENSA
refinery completed the first turnaround of its delayed coker
ahead of schedule and achieved the strongest safety
performance in its history.
SUPPLY & TERMINALS
Hess operates a network of 22 terminals strategically
located along the East Coast, as well as a terminal in
St. Lucia. These terminals provide the company a
competitive advantage in the supply of products to
our Retail and Energy Marketing businesses. During the
year, our terminals in Ft. Lauderdale and Tampa, Florida
added new tanks to support expanded distribution of
gasoline and ethanol in U.S. Southeast markets. Our
marine bunker fuels business expanded its port locations
and doubled its customer base to more than 200
customers, ranging from bulk carriers to cruise lines in the
New York, Philadelphia, Baltimore and Norfolk markets.
ENERGY MARKETING
Hess Energy Marketing is the largest provider of natural
gas, fuel oil and electricity to commercial and industrial
customers in the 14 state market area in which it operates.
The business also provides natural gas, electricity and a
full range of oil products to utilities and other wholesale
customers. In 2007, natural gas volumes increased and
electricity sales doubled compared with 2006 as a result
of strong organic growth and the full-year impact of the
Select Energy acquisition. Strong customer retention,
cross-selling of our three commodities, and new product
development positioned Hess Energy Marketing for
continued growth.
RETAIL MARKETING
Hess is the leading independent gasoline convenience
store retailer on the East Coast with more than 1,370 Hess
branded locations. Annual convenience store revenues in
2007, excluding petroleum products, were approximately
$1.1 billion. During 2007, Hess signed an exclusive agreement
to introduce a new self-service Dunkin’ Donuts offering in
many Hess locations. The company also opened 10 new
HESS EXPRESS locations and added convenience stores
to 11 existing locations. Our WilcoHess joint venture added
27 new sites in North and South Carolina. Looking ahead,
we plan to continue our growth in key East Coast markets
through selective acquisitions and new site development.
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