PBF Energy 2013 Annual Report Download - page 64
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57
• as a result of the heavy, sour crude slate processed at Paulsboro, we produce low value products including
sulfur, petroleum coke and fuel oil. These products are priced at a significant discount to gasoline and heating
oil and represent approximately 6% to 7.5% of our total production volume; and
• the Paulsboro refinery produces Group I lubricants which, through an extensive production process, have a
low volume yield which limits the volume expansion on crude inputs.
Toledo Refinery. The benchmark refining margin for the Toledo refinery is calculated by assuming that four
barrels of benchmark WTI crude oil are converted into three barrels of gasoline, one-half barrel of ULSD and one-
half barrel of jet fuel. We calculate this refining margin using the Chicago market values of gasoline and ULSD
and the United States Gulf Coast value of jet fuel against the market value of WTI crude oil and refer to this
benchmark as the WTI (Chicago) 4-3-1 benchmark refining margin. Our Toledo refinery has a product slate of
approximately 50% gasoline, 36.5% distillate (comprised of approximately 49.5% jet fuel and 50.5% ULSD), 5%
high-value petrochemicals (including nonene, tetramer, benzene, xylene and toluene) with the remaining portion
of the product slate comprised of lower-value products (6% LPGs, 2% fuel oil and 0.5% other). For this reason,
we believe the WTI (Chicago) 4-3-1 is an appropriate benchmark industry refining margin. The majority of Toledo
revenues are generated off Chicago-based market prices.
The Toledo refinery’s realized gross margin on a per barrel basis has historically differed from the WTI
(Chicago) 4-3-1 benchmark refining margin due to the following factors:
• the Toledo refinery processes a slate of domestic sweet and Canadian synthetic crude oil. Historically, Toledo’s
blended average crude costs have been higher than the market value of WTI crude oil;
• the Toledo refinery is connected to its distribution network through a variety of third party product pipelines.
While lower in cost when compared to barge or rail transportation, the inclusion of transportation costs increases
our overall cost relative to the 4-3-1 benchmark refining margin; and
• the Toledo refinery generates a pricing benefit on some of its products, primarily its petrochemicals.