Chevron, Bunge lock in previously proposed joint venture for feedstock supply
Chevron U.S.A. Inc., a subsidiary of Chevron Corp., and Bunge North America Inc., a subsidiary of Bunge Ltd., announced Feb. 22 the signing of definitive transaction agreements to create their previously announced joint venture. The new venture will create renewable feedstocks leveraging Bunge’s expertise in oilseed processing and farmer relationships and Chevron’s expertise in fuels manufacturing and marketing. The agreements are subject to customary closing conditions, including regulatory approval.
Bunge’s soybean processing plants in Destrehan, Louisiana, and Cairo, Illinois will be contributed to the joint venture with Chevron contributing approximately $600 million in cash. Plans include approximately doubling the combined capacity of these facilities from 7,000 tons per day by the end of 2024. The joint venture may also explore opportunities in other renewable feedstocks, as well as in feedstock pretreatment.
“Partnering with Chevron, a global leader in energy, is a significant step forward in building the capability to make changes at scale to help reduce carbon in our own and our customers’ value chains,” said Greg Heckman, Bunge CEO. “I am confident that our shared networks, global footprint and expertise is the right partnership to build a successful long-term and low-cost enterprise that will help meet the demand for next generation, renewable fuels.”
Under the agreements, Bunge will operate the facilities and Chevron will have purchase rights for the oil to use as a renewable feedstock to manufacture renewable diesel and sustainable aviation fuel (SAF).
“Chevron expects to create the capacity to produce 100,000 barrels per day of renewable diesel and sustainable aviation fuel by 2030,” said Mark Nelson, executive vice president of downstream and chemicals for Chevron. “By taking this first step in securing a predictable supply of renewable feedstocks in partnership with Bunge, we are positioning ourselves to meet that goal and supply our transportation customers with lower lifecycle carbon intensity fuels.”