Leading US energy company Chevron and global agribusiness giant Bunge are set to form a partnership to create renewable fuel feedstocks, the companies announced on 2 September.
The companies said a memorandum of understanding (MOU) for the 50/50 joint venture had been signed between Bunge North America, a subsidiary of Bunge and Chevron USA, a subsidiary of Chevron Corporation.
“This relationship with Chevron will enable Bunge to better serve our farmer customers by accessing demand in the growing renewable fuels sector,” Bunge CEO Greg Heckman said.
As part of the venture, Bunge was expected to contribute its soyabean processing facilities in Destrehan, Louisiana, and Cairo, Illinois, and Chevron was expected to contribute approximately US$600M in cash.
Through the joint venture, the two companies anticipated approximately doubling the combined capacity of the facilities from 7,000 tonnes/day by the end of 2024.
The joint venture would also pursue new growth opportunities in lower carbon intensity feedstocks, as well as well as investigating feedstock pre-treatment investments, the companies said.
Under the proposed joint venture arrangement, Bunge would continue to operate the facilities, while Chevron would have offtake rights to the oil to use as renewable feedstock for the manufacture of low carbon diesel and jet fuel, in addition to providing market knowledge and downstream retail and commercial distribution channels.
The creation of the proposed joint venture was subject to the negotiation of definitive agreements with customary closing conditions, including regulatory approval, the companies said.
Chevron produces crude oil and natural gas, and manufactures transportation fuels, lubricants, petrochemicals and additives.
Bunge sources, processes and supplies oilseed and grain products and ingredients. Headquartered in St. Louis, Missouri, the company operates 300 port terminals, oilseed processing plants, grain facilities, and food and ingredient production and packaging facilities around the world.