OREANDA-NEWS. Valero is considering acquisitions and partnerships that include refineries, chief executive Joe Gorder said today, months after tamping down interest in entering a frothy corporate merger environment.

The company has an internal list of midstream, biofuels and even refining assets under consideration, Gorder said at the Barclay's CEO Energy Conference. Valero has recently focused more on improving existing assets and selling infrastructure it already controls into its midstream master limited partnership.

"Valero's going to try to grow the business," Gorder said. "We'll continue to incrementally grow the refining business, and you may grow the refining business with a deal."

The company's last deals in the refining space involved the sale of its east coast business to fellow US independent refiner PBF Energy in 2010. Former chief executive Bill Klesse had considered whether to follow suit with the company's west coast assets, too, bemoaning the stiff regulatory climate and wild margin environment in California. Valero has since backed away from that idea, especially as California refining margins hit record levels amid unplanned outages at rival facilities in the state.

While refiners have enjoyed strong benefits from plunging crude prices and robust fuel demand, facilities have changed hands. PBF Energy expects to close its acquisition of the 190,000 b/d refinery in Chalmette, Louisiana, from an ExxonMobil and PdV joint venture by the end of the year. Delek US will slowly take majority ownership of fellow US independent refiner Alon USA after acquiring 48pc of the company earlier this year.

The industry has widely discussed HollyFrontier rejecting a purchase offer from Tesoro. And Total earlier this year said it was looking for a joint venture partner at its 240,000 b/d refinery in Port Arthur, Texas.

"We would buy more refineries if they fit into the portfolio and add value," Gorder said.

The longest odds for acquisition may be in the renewables space, Gorder said. Strong margins last year allowed biofuel company balance sheets to recover. But an expected record corn crop and pressure on blending economics from the lowest average gasoline prices in years could shake assets in that space loose as well, he said.

"If we have a sustained period of very low margins like we're experiencing in the ethanol business today, on a relative basis, we may get some opportunities going forward," Gorder said. "We would take advantage of those."