An important partnership creating jobs and consolidating Quebec's energy supply

MONTREAL, March 20, 2014 /CNW Telbec/ - Louis-Marie Beaulieu, Chairman of the Board and CEO of Groupe Desgagnés and Ross R. Bayus, President of Valero's Canadian Operations are pleased to announce the signing of a landmark agreement. The two companies have formed a joint venture, Transport Maritime Saint-Laurent inc. that has acquired two Panamax-class ships. These ships will serve to transport, among others, crude oil from Valero's Montreal East Terminal to its refinery in Lévis, on the south shore of Quebec City.

"That a Quebec company, a real homegrown business, becomes a key player in supplying crude oil to the Jean Gaulin refinery is absolutely tremendous – not just for Desgagnés, but also for the whole community, as this will translate into substantial economic benefits," Mr. Beaulieu stated.

As for Mr. Bayus, he said: "This partnership is very important for us. Along with the deliveries by ship, once the Canadian energy company Enbridge completes its 9B pipeline flow reversal project to Montreal, we will be able to supply 100 percent high quality North American light crude to our Jean Gaulin refinery in Lévis instead of bringing in crude from overseas. This will allow us to take full advantage of our Montreal East terminal, the largest in Canada. Investments of more than $180 million are underway to adapt our oil handling and storage facilities in Montreal East and our infrastructures at the refinery in Lévis, which will create close to 200 jobs during the construction phase."

Operated by Desgagnés, these modern sister ships that were built in 2007 will be adapted to our needs over the coming months. To this effect, they will have equipment providing excellent manoeuvrability and safety at sea as well as safe docking. The ships, with their length of 228.50 meters and breadth of 32.24 meters, have a capacity exceeding 500,000 barrels (80,000 m³), although the volumes carried during voyages between Montreal and Lévis will be limited to some 350,000 barrels (56,000 m³), depending on the St. Lawrence River water levels and in accordance with safe navigation margins.

Mr. Beaulieu noted that, "In the marine sector alone, this project will create over 100 direct, top-quality, well-paid and permanent jobs. And that's without counting increased demand for related marine services, such as piloting and tugging, which – on top of numerous indirect jobs – will generate dozens of quasi-direct jobs."

Mr. Bayus concluded by noting that, "Desgagnés is a Quebec company with which we've had a close business relationship for some 20 years. So we're delighted to work with them once again on a project of such highly strategic importance for our company and for all of Quebec, and for our supply to Eastern Canada."

About Desgagnés
Desgagnés, whose headquarters are in Quebec City, is a conglomerate that has specialized since the 19^th century in marine transportation of liquid bulk, general cargo, dry bulk and passengers. Its activities also extend to ship repair as well as the rental and operation of heavy machinery. The company owns and operates a fleet of 18 ships that navigate on the Great Lakes and St. Lawrence, the Eastern Canadian Arctic, the East coasts of Canada and the United States and all the seas of the world. Its Transport Desgagnés subsidiary specializes in managing and operating the company's ships while its Petro-Nav subsidiary markets and charters vessels and ensures shipping of bulk liquid cargo. With an annual turnover of over 230 million dollars, Desgagnés creates approximately 1,000 jobs in high season with a payroll exceeding 50 million dollars.

About Valero's Canadian operations

Valero owns and operates the Jean Gaulin refinery at Lévis, near Quebec City, which currently has a refining capacity of some 265,000 barrels of oil per day, as well as several logistics infrastructures including the Montreal East oil terminal, the largest of its kind in Canada. Its Canadian operations also make it a leader in industrial and commercial sales of petroleum products, among others and one of the most important suppliers for resellers and independent distributors. The company is one of the largest employers in Eastern Canada in terms of both the direct and indirect jobs it generates.

Valero is the world's largest independent refiner and marketer of petroleum products. Its assets include 16 refineries stretching from the U.S. West and Gulf coasts to Canada and the United Kingdom with an overall refining capacity of 3 million barrels per day.

SOURCE: Valero Energy Inc.

Groupe Desgagnés, Suzanne Laflèche, President's office, Telephone: [phone], Email: [email protected]; Valero, Michel Martin, Director, Public and Government Affairs, Telephone: [phone], Email: [email protected]