The refining segment reported $1.4 bln of operating income for the second quarter of 2018 compared to $945 mln for the second quarter of 2017.
Second quarter 2018 operating income includes $21 mln of other operating expenses primarily related to costs incurred to respond to and assess the damage caused by a fire at the Texas City Refinery in April.
Adjusted operating income, which excludes other operating expenses, was $463 mln higher compared to second quarter 2017, driven mainly by higher distillate margins and wider discounts for sour and domestic sweet crude oils versus Brent.
Refinery throughput capacity utilization was 93%, and throughput volumes averaged 2.9 mln barrels per day in the second quarter of 2018, which is 121,000 barrels per day lower than the second quarter of 2017 due to maintenance in the North Atlantic and U.S. Gulf Coast regions.
The company exported a total of 409,000 barrels per day of gasoline and distillate during the second quarter of 2018. Moving to Valero's ethanol segment, the company reported $43 mln of operating income for the second quarter of 2018 compared to $31 mln for the second quarter of 2017.
The increase in operating income is attributed primarily to higher distiller grain prices and stronger production volumes. Ethanol production volumes of 4 mln gallons per day were 227,000 gallons per day higher than in the second quarter of 2017.
The VLP segment, which is composed of Valero Energy Partners, the company's majority-owned midstream master limited partnership, reported $83 mln of operating income for the second quarter of 2018 compared to $71 mln for the second quarter of 2017.
The increase in operating income is mostly driven by contributions from the Port Arthur terminal assets and Parkway Pipeline, which the Partnership acquired from Valero in November 2017. These assets were formerly a part of the refining segment. Separately, Valero gave a strategic update: Valero's investment in Diamond Pipeline continued to pay out in the second quarter as discounts for West Texas Intermediate crude relative to Brent crude oil widened.
The company said, "We're enjoying the benefits of lower crude costs and optionality at our Memphis refinery provided by the Diamond Pipeline. Our U.S. Mid-Continent refineries are also poised to capture additional margin opportunities from increased access to Permian Basin crude oils when the Sunrise Pipeline expansion starts up in early 2019."
The company continued to advance its growth investments to increase refining margins, strategically expand its supply chain, and reduce secondary costs. The expansion of the Diamond Green Diesel plant to 18,000 barrels per day of capacity is expected to be completed in August. Work also moves forward as scheduled on the Houston and St. Charles alkylation units, the Central Texas pipelines and terminals, the Pasadena products terminal, and the Pembroke cogeneration plant. Ultimately, Valero reaffirmed its 2018 capital investment plans of $2.7 bln, of which $1.0 bln is for growth projects and $1.7 bln is for sustaining the business.