• Ron Kotrba

Alabama refinery sold, to produce renewable diesel next year

Vertex Energy is acquiring the Mobile Chemical LP Refinery in Alabama from Royal Dutch Shell subsidiaries for $75 million. Once the transaction closes later this year, the company plans to convert the refinery’s hydrocracking unit to be capable of producing more than 150 million gallons per year (mgy) of renewable diesel and byproducts by the end of 2022. By mid-year 2023, Vertex expects to increase renewable diesel production capacity to nearly 215 mgy.

“Our vision for this site is that of diversification,” said Benjamin P. Cowart, president and CEO of Vertex. “We will seek to lead the southeast region in marketing next-generation fuels and products that are not currently produced by the refinery today. Upon completion of the renewable diesel fuel project by year-end 2022, we anticipate the Mobile refinery will have the potential to generate at least $3 billion in revenue and $400 million of gross profit in the full-year 2023, given current project economics.”

Once operable, the Mobile refinery's converted hydrocracking unit will be capable of processing a wide range of pretreated feedstocks, including soybean and corn oil, tallow and waste vegetable oils, among others, the company said.

Vertex expects to source renewable feedstock through a multiyear agreement with Synergy Supply and Trading, a subsidiary of Bunker Holding Group, and potentially from the company’s planned Myrtle Grove pretreatment facility in Belle Chasse, Louisiana.

For renewable diesel offtake, Vertex plans to enter into a long-term agreement under which Idemitsu Apollo Corp., a wholly owned California-based subsidiary of Idemitsu Kosan, will purchase 100 percent of the Mobile refinery’s renewable diesel volumes.

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