Vertex Energy finishes processing renewable feedstock in Mobile, Alabama

Vertex Energy announced Aug. 8 in its second-quarter financials that it has ceased renewable diesel production at its refinery in Mobile, Alabama.

The company said it has run all renewable feedstock through its converted hydrocracker in Mobile and has begun optimizing the unit’s capacity from renewable diesel back to conventional fuels.

The company announced in May that it was switching the hydrocracker back to conventional operations after operational issues upon start up in spring 2023 and continued losses since.

Total renewable throughput in the second quarter was 3,092 barrels (129,864 gallons) per day.

Total production of renewable diesel for the three-month period was 3,082 barrels (129,444 gallons) per day, reflecting a product yield of 99.7 percent.

Vertex’s renewable diesel operations in Mobile generated a gross loss of $11.8 million during the second quarter.

The company is using a previously planned catalyst and maintenance turnaround to load conventional catalyst and bring the unit out of turnaround and back into conventional service in the fourth quarter of this year.

The total cost of about $10 million was previously budgeted as part of the planned catalyst and maintenance turnaround.

“This focus on the conventional business seeks to capture available margins in a more established market,” Vertex Energy stated.

CEO Benjamin Cowart said, “Vertex successfully processed the remaining inventories of renewable feedstock and safely decommissioned the hydrotreater out of renewable service. The company also continued to manage expenses, seeing moderate reductions in capital and fixed costs across the business. Given continued near-term EBITDA and liquidity constraints, the company continues its pursuit of strategic pathways, considering alternatives and exploring financing pathways to maximize value. This includes working with our lenders to secure additional $15 million and $20 million loans in June and July, as well as naming Seth Bullock as our chief restructuring officer. Seth has significant experience in the industry and understands Vertex’s operational and financial capabilities very well. Seth is being brought in to assist Vertex in managing through a difficult macroeconomic environment and providing additional expertise in liquidity management and performance improvement. We believe that continued support from our lenders is key to executing our strategic priorities, which are focused on managing our liquidity position, reducing our operating costs and improving margins. We are focused on navigating through the recent lower crack spreads and continue to believe that the decision and execution to convert the hydrocracking unit to conventional fuels will help us toward accomplishing our strategic priorities for the second half of 2024 and into 2025.”

Vertex reported a 28 percent decrease in crack spreads in the second quarter compared to the first.