![]() While California remains the primary market for domestically produced renewable diesel, given the economic benefits for its use under the state’s Low Carbon Fuel Standard, other states are expected to follow suit, creating significant, incremental demand during the next decade. Upon completion of the project, which is expected to conclude by year-end 2022, the refinery will commence production of approximately 10 000 barrels per day of renewable diesel, increasing to 14 000 bpd by mid-year 2023, while continuing to supply conventional fuels to the regional market at the current rates. Cowart, President, and CEO of Vertex Energy. The acquisition of the Mobile refinery will be the largest, most significant transaction ever completed by Vertex, one that positions us to become a leading regional supplier of both renewable and conventional products, said Benjamin P. The addition of renewable fuel production associated with the refinery will accelerate Vertex’s strategic focus on “clean” refining. Upon completion of the transaction, Vertex expects to initiate a US$85 million capital project designed to modify the Mobile refinery’s hydrocracking unit to produce renewable diesel fuel on a standalone basis. The refinery, which has a long track record of safe, reliable operations and consistent financial performance, will become Vertex’s flagship refining asset upon the close of the transaction, positioning the company to become a pure-play producer of renewable and conventional products. Subject to regulatory approvals, Vertex Energy will become the sole owner and operator of the Mobile refinery upon closing. All employees providing dedicated support to the Mobile Refinery will be offered employment with Vertex Energy. We’re becoming better positioned to deliver resilient returns and meet the increasingly diverse needs of our customers, said Robin Mooldijk, Shell’s EVP for Manufacturing.Īs part of this deal, Shell and Vertex Energy will have crude supply and product offtake agreements to support Shell’s customers in the region. The sale of the Mobile refinery shows that we are making good progress delivering on our manufacturing strategy. These high-value Energy and Chemicals parks will produce more low-carbon fuels and specialty chemicals for Shell’s customers. Vertex expects to fund this transaction and the related renewable diesel capital project through a US$125 million debt facility and cash generated through potential asset divestitures, with the balance coming through the sale of common equity if required.Īccording to Shell, the divestment is part of Shell’s strategy to reduce its global refinery footprint to core sites integrated with the company’s trading hubs, chemicals plants, and marketing businesses. The transaction is expected to close in Q4 2021, subject to regulatory approvals. Divestment part of refinery reduction strategy The consideration for this transaction is US$75 million in cash plus the value of the hydrocarbon inventory which will be valued at closing based on actual volumes and prevailing market prices. The agreement covers the sale of the Mobile refinery and associated co-located logistics infrastructure, including product racks, an associated dock, and the Blakeley Island Terminal. It has the optionality to run as a stand-alone refinery, produce base oils or chemicals feedstock. It also produces low-sulfur VGO/Heavy Olefin Feed and Benzene.
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