October 30, 2024 [Reuters]- U.S. crude oil refiner Phillips 66 plans to operate its refineries in the low to mid-90% range of combined capacity of 1.5 million barrels per day in the fourth quarter, Chief Financial Officer Kevin Mitchell said on Tuesday during a conference call with analysts.

This month, Phillips 66 announced plans to permanently shut its 139,000-bpd Los Angeles refinery in 2025.

Chief Executive Mark Lashier said the decision was based on long-term review and not on recent requirements for refiners to keep emergency fuel supply on hand as well as undergo reviews of their profits by the California officials.

“The refinery, if you think back historically, was originally designed to process in-state California crude production, and that’s declined by about 75%,” Lashier said.

Declining motor fuel demand combined with a state policy to move vehicles away from fossil fuels make California “a pretty challenging refining market going forward,” Lashier said.

Valero Energy Corp said last week it was considering all options for its Los Angeles and San Francisco-area refineries due to the challenges in West Coast markets.

Phillips 66 expects its full-year 2024 refinery turnaround expense to be around $485 million to $495 million, a reduction of more than $100 million from previous guidance, Mitchell said.

“We’ve actually gotten much more efficient at our execution through a number of initiatives that we’ve put in place with the turnarounds and we’re seeing the fruits of that labor come through now,” Mitchell said.

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