There'd be snow, and I wondered how many would show up. There was no snow. You all deserve a lot of credit for your interest in Valero and in the industry, and I want to thank you for being here. Appreciate it very much.
Bill, the slides are coming up here in a second.
Oh, okay.
And, the gentleman at the back, is just moving those over. Sir, can you-
We had an excellent 2012, and the fundamentals continued to improve. They remain with us. They are improving. Just think about some of Doug's slides then, but we have low natural gas costs. We have lots of crude oil coming at us, and it keeps getting more and more. Every forecast is raised. A whole bunch of consultants have come out the other day and have raised these differentials going through the rest of the year, and exports are key to the industry. Basically, there is more refining capacity in the United States relative to demand, so you have to have exports. Our safe harbor. I know some of you follow us, some do not. Just a brief overview. We have 16 refineries, about 3 MMbpd of capacity.
When you count crude and feedstocks, we run about a little over 2 MMbpd of crude, 6,800 branded. We are really a refiner and wholesale marketer with a branded marketing operation. We are spinning off our retail, which I have a couple other slides. That is the company-operated piece of the retail. We have a large renewable fuels business. We believe ethanol continues to be part of the fuel mix. We think E10 is part of the mix. E85 is part of the mix. We are not supportive of E15. Diamond Green Diesel is a project that is going to produce renewable diesel. It actually fits into the California regulations. That should be done in the second quarter, and we have a partner there in Darling out of Dallas.
We have approximately 22,000 employees, but that will drop significantly when we spin off retail in the second quarter. Looking at our footprint, we are a diverse organization. Obviously, you can see the ethanol plants in green and the light green up in the Midwest. The refineries were spread out across the country. We exited the East Coast of the United States, but we did buy Pembroke in Wales in the U.K., and we shut down our Aruba refinery. It is now a terminal, but the refinery is mothballed, as there is lots of development happening in the Caribbean, and the refinery has excellent crude vacuum, visbreaker, and cokers. We think, as you see in the lower right, complexity still matters.
I will acknowledge to you it is location, location. If you do not have location, you have to have logistics, but still you have to have the hardware. I mentioned that we are spinning off retail. For those that do not follow us, it is actually a spin to our shareholders.
We are going to spin 80%. It is a value creation. If you look at the chart, it really tells the story of what we are doing. By the way, this whole presentation is in our handout, plus in a very thick appendix. Matt and Ashley have spent a lot of work on our presentation. There is a lot of industry data there, as well as specific to Valero. Make sure you grab a copy of it. Looking at this is a delta chart of EBITDA multiples. We picked two of them, Couche-Tard and Casey's. You can see how it has tracked over the years. It is compared to Valero, so it is the delta. We really think we are going to have a lift here of 4x-5x when we spin it to our shareholders. Value creation is somewhere in the neighborhood of $1.6 billion-$2 billion of value creation.
It will be a dividend. We do 80%. We are levering it up a little bit. Valero will get about $800 million net after we pay some taxes in Canada. It is a tax-free spin. A little more on this. CST is 1,900 units. It will be one of the largest retail businesses in the U.S. It is 1,000 company-operated stores, most of them in the Southwest, going out through California. Canada, it is 800. There are three basic businesses as you can see there. We also have a home heat business. The highlights, it is large. Obviously, that is a large scale. 61% of the U.S. sites are in Texas, which is obviously a more favorable economic area. There is lots of ownership. In the U.S., 82% or so of the outlets are actually owned. So solid track record.
You can see that on page 30 in the appendix if you want to look at it later. It shows you the history of its EBITDA performance. It is a competitively positioned business. It is excellent logistics. Private label program food is one of the big growth items in retail, and we have excellent leadership, very capable leadership in that business. Switching back to Valero, the first four items listed here really apply to the entire industry. The last one is a little more specific to Valero. There have been closures. I know some refineries have come back from the dead. Some of them are already dead. They are just zombies, and they do not know it. But some have come back. If you think about the whole competitiveness of the U.S., and I will go into that in more detail, we have this oil. It is coming.
We talk mostly about oil and natural gas in this presentation, but I can. For those of you investing in other companies, the NGLs are coming just as quickly. Ethane, propane, butanes are all coming with the gas production. The last one is very specific to Valero, is that we have a changing yield structure from our refineries. We are very focused on distillates, high-margin items, and actually it is Gas-to-Liquids, which I will cover in a little more. Looking at the closures, there have been closures in the Atlantic Basin, whether it is the East Coast, the Caribbean, Western Europe, things have closed. Hovensa has closed and gone. Marcus Hook is gone. If you think about Hess has announced Port Reading is shut down.
Imperial Oil in Canada, Halifax, there is some debate where that is going to actually wind up. Tesoro Corporation announced Hawaii is going to shut down.
Australia, there are shutdowns. As you look at this chart, there are closures. Yes, Trainer did come back from the dead. We understand that. Petit-Couronne in France is down. It is not running oil. Our view is it is going to eventually close. The weakest competitors, quite frankly, are Western Europe. If you think about it as we go through this, they do not have low-cost natural gas. They do not have the oil coming. So it is obviously in the Atlantic Basin, the weaker competitor. Exports are key because on the supply side, obviously Venezuela, Mexico, there has been lots of refining issues. So that creates a market for us. Looking at the Atlantic Basin, it has been a key part of our strategy. We exited the East Coast. We picked up Pembroke from Chevron and the whole business. You can see how products move in this Atlantic Basin.
This is a big market, as you guys can imagine, between the U.S., Western Europe, South America, and West Africa. You could see that we are moving these products all around and we compete very well in the business. Looking at the Gulf Coast and some of the crude discounts, product margins, and we have a couple more slides on this because it is the topic that gets a lot of attention here. You can see the blue is the fourth quarter of 2012, and the red is the first quarter to date of 2013. Gasoline gas crack is a little better. The distillate's just a hair less. The LLS to Brent, still, it does not reflect where we think it's going. We truly believe LLS will sell at a discount to Brent, and it's going to happen here. It bounces around.
It did for a while. Now it goes back on positive, but it has to, if you think about it. It has to just because of price. You can see the Mars, the medium sours, and the heavy sours here. The fourth quarter, we had very good heavy sour discounts. A lot of oil was into the Gulf of Mexico, heavy oil, and thus coking was very good in the fourth quarter. Remember, Valero has a mixture of light crude refineries and heavy crude refineries. Now, we talk about the shutdowns there, and then you come over to the demand side. This gives you a long history of demand. 2004, if you remember, which really kicked off the golden age of refining in the sense was huge demand to think that the whole world grew almost 3 MMbpd of oil consumption. Very large.
The rest of the periods, you could see, obviously 2009, the end of 2008 and 2009 were huge hits. Frankly, the U.S. has not recovered from that. You all know that when you look at the distillate numbers, the gasoline demand numbers are still way down. Then you see the recovery in 2010, and you get out here to 2012. We think its net number there is about 700,000 bpd of growth. This year, we're looking for more around 1 MMbpd , 900,000 MMbpd- 1 MMbpd. There's a lot of different forecasts, and we're only at the beginning of March. But clearly the world continues to grow, and that's in the developing countries of the world. It is really not growing as the chart actually shows here in Western Europe, Japan, or the United States.
With economic recovery, Doug had it on his slide, we should get some uptick in demand, but demand growth in North America is not a key part of Valero's story about our stock performance. Now, capacity's growing in the world as well, and quite a bit of capacity's coming in. We show here 2013 through 2017, and obviously the further you get out, it gets a little hazier, and we know that. 2013, 2014's pretty solid, and 2015. You can see there's capacity in China and the Middle East coming on. The two Saudi refineries are shown here in blue, and you see that. There is growth.
The other side of it is just remember some of the new capacity that has been announced in Mexico, Brazil, Colombia, a lot of these places, it is either not going to get built or it is going to be far later than what has been forecast. You say, "Well, why?" Remember this Brazilian refinery that is going to be done here in another year or so. Originally, it was going to be $4 billion. It was going to be already running. They are now talking about $20 billion. It has still got another year or so to get there. The Tula refinery in Mexico, they are saying $12 billion. I will assure you, if they build that, it is going to be much more than $12 billion.
Personally, I don't think that the new administration in Mexico will do this, but if they do, it will be later, and it is going to cost them a lot more. Thus, that is why, as you see our story, we think exports for the entire industry, not just Valero, in fact, happen, and I will talk more about that in a few minutes. The other places, though, Ecuador, Peru, Algeria, Egypt, they just don't have the money for these kind of things. So they announce the stuff, it is not going to happen. So what is happening with crude oil?
Well, if you don't know about this, I guess you haven't been paying attention, because oil is coming very rapidly. There are all different kinds of forecasts, 700,000 bpd increase, 800,000 bpd increase. I saw another guy here in New York put out 1.3 MMbpd
January of 2013 to January of 2012, I think it was up 1.3 MMbpd . That is oil, 55 API or less. Then you have all the NGLs on top of that. So this production is coming very rapidly. So if we look at this, just on this slide here, and then if you look at our lines, the orange dotted line is the U.S. Gulf Coast light crude imports for last year, and you can see it averaged about 500,000 here, 449,000. But in December, it was all the way down to 100,000, 150,000. Now, the facts are, remember, in December, lots of different things happened. LIFO, there are a lot of things in our industry. But the facts are this is coming down rapidly. A few years ago, it was 1.5 MMbpd of imports into the Gulf Coast of light sweet crude.
As you can see in the chart, as much oil is coming, BP is the green, their conversion, in 2013. That is a little delayed now, so I am unclear when their project is actually going to be done, but it is very large, 200,000 bpd or so. So a lot of sweet oil is getting pushed back into Cushing, let alone the production, and then it is eventually going to get pushed to the Gulf Coast and the pipelines are getting built. In the back in the appendix, we have all this detail on these pipelines. The place that it is going to move to, though, is the U.S. Gulf Coast. On this slide then, we show some of the logistics capabilities, and this is logistics to the U.S. Gulf Coast.
We have in 2016 an estimate, that black dotted line on the chart, which is a little less than 4 million, but frankly, every single forecast we get from people now, it is always higher. I cannot think of anybody that is revising their production forecast down. Here is a forecast says this, but the facts are the oil is being found produced and eventually come into market. If you look at this chart, and you can see we put on the Gulf Coast, too, that dotted orange line. You can see that there will be a lot of takeaway capacity. This includes rail and pipe. Rail primarily from the Bakken, because we think that is how it is going to clear. Pipe from Cushing, bringing this all to the Gulf Coast. This is to the Gulf Coast logistics. This does not count some of the other logistics.
Just so you know how our chart works here, this is a year-end number, so that you can see. It will not be an average for the year, but it is going to the Gulf Coast very quickly. When the arb is open, as wide as it is, $20, pick your numbers, at different places, $40 against Brent for WCS, things like that, you know things are going to get built. There is too much money sitting there. At great risk, but since everybody wants to talk about this is kind of how we look at it for the next 12 to 24 months. Part of this chart for us, the key is to think that we believe New York Harbor is where it is going to balance against Brent. Brent is still coming into the East Coast. You are going to ship it from the Gulf Coast.
You are going to rail it into the East Coast. All of you that are following the other companies that operate on the East Coast, they are all building rail. Phillips 66 publicly announced that they had contracted for a ship to bring it up from the Gulf Coast. You know if anybody wanted to do more of that, it is $5-$6 a barrel from the Gulf Coast on a Jones Act ship. You know these markets are clearing like this. Our view is New York Harbor is the place it is going to clear, and then you are going to have this all the way back to all the appropriate places that ultimately approach the tariffs, until the point where you have no other place to put the oil.
I believe that is further out, though, because refiners like us, other refiners, are all trying to figure out how to run more light oil. In the U.S. Gulf Coast, where we have heavy crude refineries, we are trying to figure out how to run more light oil, which we will talk some more about. You see how all this clears. The Bakken is clearing by rail. We already know we did not put the line on here, but another one of the companies is taking it out to Washington by rail. You know it clears like this, rail tariffs, pipeline tariffs. It is all eventually going to come to the Gulf Coast.
Our view is that Cushing, when you get closer to the end of the year, and so let us say it is late, so now we are into 2014, but you have Keystone South with a lot of capacity.
Seaway's building another line. Eventually, they'll solve their problem in Houston. Then they have the other line. You have the BridgeTex line. You have Longhorn reversing. You have all these pipelines that are bringing Cushing, West Texas, down to the Gulf Coast. Then the question becomes: how fast is the production going up? Is it going to overwhelm the Texas-Oklahoma area by production increase? If not, this almost has to go to some relative ratio of a tariff. If production overwhelms, then you're still in the same boat, producers looking for marginal takeaway capacity. You look at the Bakken, you look at the Canadian, same kind of situation. How's it going to move? Well, the increment's rail. We're buying rail cars just like everybody. It's very interesting when you think about it, that guys like me are talking about rail cars. The next slide here is Keystone.
We believe it will be approved, so we're sticking to our story. The environmental impact statement really didn't raise any issues. They altered the route there over the Sand Hills in Nebraska, getting down to Steele City. So we do believe it'll happen. We think it's a 2015 project. The southern leg, though, is happening. Remember, that is under construction here. We expect the southern leg to be done as late 2013, maybe it's the early part of 2014. That goes into Port Arthur. That is an advantage for Valero. We want the oil over at Port Arthur. We don't necessarily want it in Houston. So that helps us a lot. Then it goes down to Houston. But we do expect rail, all these pipelines, all these other things to happen. If Keystone's not improved, the oil's still going to come to the Gulf Coast.
I believe what'll happen here is the producer's going to lose some of the revenue because it's going to go by rail, it's going to go by alternate pipelines, it's going to go by barge. It's still going to flow. So back to Valero. So some of this was just industry stuff there, which does impact us greatly, though. But back to Valero here. We always get the question of how much light oil can you run because we're deemed to be this heavy crude refiner, but frankly, we run a lot of light oil as well, and a couple of years ago, I never would have said that at one of these meetings because we wanted to be known as a heavy crude refiner. But you can see here we've been doing things, imports in the fourth quarter.
We did not run on the Gulf Coast any foreign light sweet. In January, we did buy a distressed cargo of some light sweet. So look, if you listen to our earnings call, we always act in our economic interest. So there was some economics there to do that. But you can see some of the movement in the mediums and light. We can run today over 500,000 bpd. But we're doing a lot of stuff as well that'll allow us to run more light sweet, substituting a lot of what? Our medium sours, pushing the medium sours out. Medium sours are Middle East crudes, some of the Brazilian crudes. Those type of crudes start to get pushed out.
Now one of the huge advantages, because if you remember earlier, I said we do not really think U.S. demand is, even with a strong economy and yes, we will sell more fuels, because over 80% of Valero's output is fuel. We will sell more in the United States, but that is not really our story. Our story is that this is one industry in this country that can compete, one manufacturing industry that can export. Some of the reasons, sure, we have very talented people, have skills, welders, pipe fitters, operators, instrument people, lots of skill sets.
But we also have some fundamental advantages now that we did not have a few years ago. Low cost of natural gas. It is huge for a company like us. Just to put this in perspective for you, $0.25 per barrel in operating costs, cash operating costs or cost of goods sold, which is hydrogen.
It is about 50/50. $0.25 per barrel, so it is cash, per dollar per Mcf. So if you have an $8 lower per Mcf or million BTU gas price, that is $2 a barrel cash for Valero. I have seen some other companies give this number. The reason ours is a little higher is we have a lot of hydroprocessing. You take natural gas to hydrogen into the products, and that is a cost of goods sold. But cash-wise, $8 on gas, $2 a barrel. Why is that so significant? Valero's cash operating cost, $3.60 a barrel, $3.70 a barrel. It is right in that range. I know you are wondering, well, why do you because that is $0.09 a gallon, right? Now you are wondering, why do you pay $4 at the pump? Well, it is not because of the refiner.
Anyhow, think about the magnitude of what I said on natural gas. If our cash operating costs are $3.60 and an $8 difference is worth $2, you can see this is a huge competitive advantage. Looking at the chart in the U.S., we just use $3 here. I know it is a little higher than that. If you go over here and use $9 in Europe, if you come over and use $15 on LNG, you can see why we can compete. We use 700 million BTUs a day or Mcf a day. Every dollar is $700,000 a day, and then you can convert it to the proper places on our income statement. But you can see this is significant. A huge competitive advantage that is unique to North America. The other thing that Valero's doing is we are growing our distillate production. We are really changing our output.
We do that because distillates are growing faster in the world, and they have better margins. There is another reason as well. The chart on the left shows the margins. The red is diesel versus Brent, and the blue is gasoline. Gasoline started out weak, but it always starts out weak. Remember, we are dealing year to date in 2013 versus 2012 is the whole year. So you can see, though, where the margins are. But growth, diesel on average is growing 2x gasoline in the world. 2012, it was flatter. Remember, China was having a contraction. We have had mild winters. There has been a lot of things going on here, but we still believe diesel is going to grow twice as fast. So you can see lots of growth. Valero then has been continuing to make more distillates.
We have these two big hydrocracker projects, about $1.5 billion, $1.6 billion apiece. We finished the one at Port Arthur. It is operating, and it is a 60,000-bpd hydrocracker, our permit is 57,000. The one at St. Charles will be done and operating in the second quarter. We are a little behind on that, finishing it. These are very large jobs for our company, there is no question about it. They are the right job today because they make diesel and if you think they are a Gas-to-Liquids. You look at these projects, very unique to us, and you go to this chart, and you see what is happening. Our distillate yield before the hydrocrackers came online was about 33% of our product because remember, the U.S. business is geared to make gasoline.
Take ethanol out, about 8 MMbpd , 8.2 MMbpd, 8.3 MMbpd comes from refineries. Diesel business is about 3.6 MMbpd , 3.7 MMbpd in the U.S. Even in the U.S., it is very gasoline-oriented. In the world, distillate demand is higher than distillate demand or consumption for gasoline. Then you can see here just a couple of competitors. With our hydrocrackers operating, we are going to be just about at 40%, 39%. The chart on the other side just shows the gasoline diesel. The key point with us is we really are changing our output a lot here. When we were going to expand these units, we have another project we are working on at Meraux, and we will very soon, probably by 2015, we will be really a one-to-one gasoline-to-distillate ratio operation.
The reason you have two things going on on these hydrocrackers, you have the distillate, which I just spoke about, this distillate crack. They are also, we have a very nice chart in the appendix. They are a Gas-to-Liquids project. Natural gas to hydrogen into the hydrocracker, 1 bbl in, we get 1.2 bbl out. That 0.2 came from the hydrogen. $3 natural gas, let us just say its hydrogen is $40, $50, and then it makes distillate that is $110. That gas portion, the Gas-to-Liquids piece there, has a gross margin $50, $60, $70 a barrel. You have Gas-to-Liquids, and you are going to see more of these type projects, I believe. Gas-to-Liquids, and then you have the product that you ultimately make, the majority product actually being distillates growing faster in the world.
We continue to improve our operations. We are working hard on this. First quartile is our goal. It is a goal for the last few years for any of you that have followed us. We have had significant improvements. Energy continues to improve. Our CO2 footprint is shrinking. When you look on the same basis, if you keep it to the same basis, you cannot count new units. Keep it to the same basis, our CO2 footprint shrinks. If you look at mechanical availability, it has improved remarkably. We have major effort in the company. We want to be a safe, reliable, and steady operation. We slipped a little in 2012, but it was primarily driven by Meraux where we had an upset, and then we did some work, and we actually did what they call Positive Material Identification and a very thorough thickness inspection.
It took us about three months. Capital spending. Last year, we spent $3.4 billion. In 2011, we spent $3 billion. We have had high spending. You can see the different categories on the chart. We had given you guidance of $2.5 billion for 2013. We have raised that guidance to $2.85 billion here at this meeting and in this handout. That $350 million increase, part of it is St. Charles. We are overrunning, have overrun and delayed at St. Charles. Also, we have some logistics that we are doing. Obviously, we are doing, as I said earlier, we are doing rail as well. We do have guides. When we look out to 2014, we are still in that two five, two six, two seven range. Capital spending has dropped for Valero or is expected to drop for Valero. We have very good financial strength.
We expect to generate a lot of free cash flow, a lower capital spending, the margins and all that. We have been returning cash to the shareholder. We raised our dividend here in January, so we are up to $0.20 a quarter, $0.80 a year. Over the last two years, we bought 27 million shares, and you can see that at the bottom chart on your right, shows you we have been returning cash to the shareholder. Our dividend payout up at the top, you can see that chart as well. Our goal is to have one of the highest cash yields. We know that has come down quite a bit here with the stock run we have had, but it still remains one of our goals. We have a lot of cash, a good credit, nothing drawn. Our balance sheet is very strong.
One of our other goals is to maintain our investment-grade rating. This retail spin-off, though, the way I view it, and the way Gene and Joe would view it, is this is a dividend to our shareholder. We are dividending value to the shareholder, so we continue to be value-focused and returning value to the shareholder. Our strengths, you expect us to do this. This is our job to be focused on safety, environmental, regulatory compliance. You expect that. We all know what happens when managements fall down in this area and our people fall down. Very strong focus. We need to complete our projects. I have mentioned we are a little behind at St. Charles. It will get done here in the second quarter. We continue to improve our portfolio and continue to return cash to our shareholder, with our goal being to increase our long-term shareholder value.
Even though we have had quite a stock run, a stock price run, we still believe that we are an excellent buy, still. Lots of things are going our way. Remember a few years ago, I would come to a meeting and you all thought Reliance was going to kill us? I have not had a question on Reliance unless I bring it up. The U.S. is so competitive here, and Valero is doing the right things to capture its piece of this market that lets us be able to export. It is not the same as the golden age of refining. This is between the mountains. When you think about it is between the Appalachians and it is between the Rockies. It is all about location in this corridor, and if you do not have the location, you have to have those logistics to try to take advantage.
Oil is coming down, everything is coming down toward the Gulf Coast, and that is why these discounts and everything are going to move that way, and that is why Valero is very well-situated to do that. Atlantic Basin, there have been closures. Who is the weak link refining in the Atlantic Basin? Western Europe. The magnitude, maybe 2 MMbpd-3 MMbpd . You can see how the whole thing is shaping up for us. Shale production, investing in projects so we can move lots of barrels. The hydrocrackers are a uniqueness to Valero. They are coming on. One is on, the other one is coming. We expect to return more cash to the shareholders. Our retail spin, it is very difficult for us to figure out how much the market is giving us credit for this $3-$5 of value that is being spun out.
I thank you very much.
Bill, thank you very much indeed. We are running a few minutes late, folks, but we are going to take five or 10 minutes for questions. I believe there is a button in the back of your seats if you have any questions. We also have a microphone here if the buttons are not working on both sides. Thank you. Bill, maybe I could just kick off with one. You did mention the potential for LLS discounts relative to Brent. There are a lot of moving parts, obviously, particularly with Keystone potential exports or swaps with Mexico, I think are now being talked about by the EIA. How do you expect heavy oil discounts to follow LLS? At least how do you expect that relationship to move forward?
The way we would look at the heavy crude discounts is they are going to be against Brent. You got Brent. We expect LLS to go below Brent. In our mind, it has to because you have all this light oil. It does depend where you talk about. We will say St. James, Houston, Corpus Christi. There are going to be all these differentials on the Gulf Coast. If we just make this simple, Brent, a discount, LLS, then you are going to have a discount for heavy Maya, but it is really going to be relative back to Brent. I would say to you, if everything happens the way we just said, LLS to Maya will narrow. It will still be economic to process, though, into a sunk coker because if you have a 10%-12% price discount against Brent, you will have economics through your coker.
Then who sets the price for the products? Products can be exported, so products are at world price. Brent is the crude that is setting basically, in the whole scheme of things, world prices. What happens? We will still have margin to do it, but I would not mislead you. Our view is LLS to Maya, say, Maya heavy crude price will narrow. Brent will stay wide enough to run.
Thanks. Any questions from the floor? Again, we have two microphones on either side. Please, you at the front.
What about LLS to WTI?
LLS to WTI. Our view there is it is all about pipelines. From Cushing, price point Cushing, let us say St. James is the price point. You got the pipelines coming to Houston, right, or to Port Arthur. Now, there is a lot of volume. BridgeTex, Longhorn from West Texas. Seaway has not done its 400,000 bpd , but eventually they will. They are building a second Seaway called something, and that is another 440,000 or so. Then you have Keystone South, which I see all different kinds of numbers, somewhere between 500,000 and 800,000. All right? Coming down Port Arthur back to Houston. Where we see it really is Houston becomes bottlenecked. Now you have the ECHO line that takes some over. Everybody is looking at barges. Some of our competitors, we have announced stuff too, to move barrels along the Gulf Coast.
Our view is you are going to have St. James, you are going to have a discount coming back to Houston, you will have discount coming back to Corpus. It is going to narrow approaching the tariff. We would have said that when Seaway started up and they started to bring 200,000 down to the Gulf Coast or 200-something, and then immediately they had that bottleneck in Houston, and so there was no place to move the oil, so it pushed the discount right back to Cushing. I concede, if I had that crystal ball, I would give you to tell you, "Hey." You can tell that there is so much oil, it has got to be moving. Our view is it is flooding the Gulf Coast. When you talk to the producer guys, I think they see the same thing. It is flooding. What are we going to do?
We are going to take some to Quebec. We already got our license to do that. We can take it from Corpus to Quebec. We will be able to do some of that this summer. Our license is for 90,000 bpd for the year. You can do that. Irving, all these other guys are going to fill the Canadian refineries. The Canadian refineries are going to get it by rail from west to east. Line 9 coming into Montreal gets reversed. TransCanada has got its pipeline they are talking about, the conversion, because they have no natural gas on the line anymore, so they are going to have this big trunk line that is idle.
This is why Keystone XL is not as important to a Valero as we thought it was four or five years ago, because all these pipelines are going to move this oil to the east, and maybe they do something going back to the west. This oil is going to come up and you are going to fill all these corridors. You may take some to the West Coast on water. Frankly, rail looks to us is going to be very viable into the West Coast. At some point, if there is this much oil, you are going to have to address the export question. We would say it goes to the tariffs. It has got to come to the tariffs.
It may not be St. James. St. James may be discounted to Houston is discounted back to Cushing, and you may have a couple dollar freight for Brent to Houston. This could still be $7, $8, $9 if you add up all the components. We look at it as it has got to go to tariff, but where is the point you are clearing?
Take one more over here on the left.
Thank you. Can you just discuss how many of your rail cars, the 5,300, are dedicated to Canada right now, bringing WCS down?
Could you start over? I just didn't hear the first part.
How many of your rail cars, the 5,300, are dedicated to Canada. Bringing WCS down, and can you talk about the timing, the production volumes? Ultimately, when you start to bring that down, how do you see that impacting Maya over time in terms of how much volume you need to get down there potentially?
I am going to let Joe answer this. He is in charge of all these rail cars. Just come up here. The rail cars we have been ordering are coming in over time, and frankly, there is this 18-month lead time. When you order a rail car today, you do not even see the first one for 18 months. The question is, how moving Canadian oil, I think, and with the rail.
Okay. Well, good morning. Our plan right now of the rail cars we got, probably 1,600 of those are going to be coiled cars, which will allow us the opportunity then to take raw bitumen, move it in the car, load the car, and then bring it down, put the steam on it when it gets there, and then move the oil out. We are anticipating the volumes to be anywhere from 25,000 bpd- 30,000 bpd of raw bitumen going into St. Charles on rail. We are also looking at the possibilities of moving heavy sour Canadian crudes into our Wilmington refinery. We have got an allocation of rail cars for that. That is not likely to be bitumen. That is going to be like a WCS or some oil that has got a diluent in it that would flow.
We will be able to move volume in there also, and that could be 30,000 bpd . That is our plans for the rail cars right now.
We also are shipping heavy Canadian oil. We actually ship down to Mississippi from our Hardisty terminal, 25,000 bpd, 30,000 bpd on barges. We are just like a lot of the guys, we are trying to grab. When we see a $40 discount, remember my $3 operating cost? Our eyes go, "Whoa, how do we get that?" We are doing all those kind of things too. But the rail car lead time is amazing to think that you order a car today, you are not going to see it for 18 months. If you order 1,000 cars, that is the first car in 18 months, then they come into you over the next 12.
Bill, if I may take the last one, then we will move along. Just a few words perhaps on the possibility of an MLP of your midstream infrastructure that you are building out.
Yeah, sure. The MLP. We see what the marketplace is doing. We saw, frankly, I think Tesoro was very creative on how they financing the acquisition in California. We see that. What we have said is we are going to finish our retail spin. Quite frankly, this is very complicated. Private letter ruling today with the SEC, and I said that will happen in the second quarter. We are convinced all the i's are getting dotted and all the t's crossed. That will happen. But that is taking our capacity to do that type of deal. Then I have said to people as I speak to them, we are going to look at an MLP very seriously. We have somewhere between $50 million and $100 million of EBITDA that we can readily identify to put into an MLP, and that is really pipeline and terminal, nothing else.
We have some pipeline projects which we are doing. We are JVed with a couple different people on projects. We have said we are going to look at it very, very seriously here, but we are going to finish our retail spin,
Bill, thank you very much indeed. Thanks, guys, for coming up.
Thank you, everybody.