Vertex Energy to Acquire Shell’s Alabama Refinery

Oleochem Analytics – Equilon Enterprises, a subsidiary of Royal Dutch Shell, announced it has agreed to sell its 90,000 bbls/day Mobile Chemical Refinery in Alabama to Vertex Energy, a Texas-based specialty refiner of alternative feedstocks and marketer of petroleum products.

The transaction is for $75 million in cash plus the cost of hydrocarbon inventory, currently valued between $65 and $85 million, according to the company.

The transaction is expected to close in Q4 2021, pending regulatory approvals.

Once the transaction closes, Vertex plans to convert the refinery’s hydrocracking unit to produce more than 150 million gal/year of renewable diesel and byproducts by the end of 2022. By mid-year 2023, the company expects to increase renewable diesel production capacity to nearly 215 million gal/year.

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, a wholly owned California-based subsidiary of Idemitsu Kosan, will purchase 100% of the Mobile refinery’s renewable diesel volumes.

“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”, Benjamin P. Cowart, president and CEO of Vertex said.

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.

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