US refiners aim to maximize distillate output to work attractive export arbitrage opportunities, but may leave high-priced hydrocracker investments to competitor Valero Energy, who wants to be the first North American refiner to produce as much distillate as gasoline.
Valero plans to implement a one-to-one gasoline-to-distillates ratio by around 2015, after more than $3 billion worth of projects go live to increase the company's distillate production, the company said.

Hydrocracker projects are under way at the company's 180,000 b/d Meraux, Louisiana, 290,000 b/d Port Arthur, Texas, and 270,000 b/d St. Charles, Louisiana, refineries. Hydrocrackers allow for the reprocessing of various feedstocks into higher value products and give a relatively large yield of low sulfur distillates like jet fuel and diesel.

Historically, US refiners have had a two-to-one output ratio for gasoline and diesel, respectively, according to the Energy Information Administration. For the reporting week ended May 10, US finished motor gasoline production was 8.929 b/d while US distillate fuel oil production was 4.640 million b/d, the EIA said
Valero plans to shift its product slate, with refining system distillate yields estimated to grow to 39% this year from 33% in 2010 of total production volumes. At the same time, gasoline yields will decline to 42% in 2013 from 49% in 2010.