Valero Energy Corp. said Wednesday it plans to close its Aruba refinery indefinitely and most of its 700 employees will be laid off.
The refinery, which had processed about 275,000 barrels a day, has been shuttered since mid-July as falling prices for its refined products made the plant less profitable. The San Antonio-based refiner had said it would decide in August whether to restart operations.
"Unfortunately, the difference in light crude price and that of sour crude has not increased and the product margins remain low, making the operation of this refinery unprofitable," Valero said in its Wednesday statement.
Bill Klesse, Valero's board chairman and CEO, said "when the global economy improves, we expect that product demand, sour crude oil production, and refining margins will also improve."
A spokesman for the Independent Oil Workers Union of Aruba, which represents most of the plant's employees, did not immediately return a call for comment.
Valero, the largest refining company in the U.S., bought the Aruba plant in 2004 but has been looking to sell it since last year. No date had been set for a sale, and the company has declined to provide further details or prospective buyers.
The facility processed heavy crude into distillate products that were shipped to U.S. refineries to be made into lighter fuels including gasoline.