US speciality refining company Vertex Energy has announced a five-year renewable diesel supply agreement with Idemitsu Apollo Renewable Corporation – a subsidiary of Japan’s Idemitsu Kosan.
The agreement was conditional on certain conditions, including the closure of Vertex's previously announced planned acquisition of the Royal Dutch Shell Mobile refinery, in Alabama, and the subsequent conversion of its hydrocracking unit to produce renewable diesel fuel, Vertex said.
Vertex said its project was due to become operational by the end of this year, following the completion of the acquisition.
Under the agreement, Vertex will supply 100% of the renewable diesel produced at the Mobile refinery to Idemitsu for five years, while Idemitsu will pay Vertex for each gallon produced at an indexed, spot-market price at the time of production, according to the 17 February statement,
Vertex said the estimated revenue from the five-year agreement would exceed US$6bn.
The agreement with Idemitsu would provide Vertex with access to growing regional markets in the western USA and Canada, the company said.
Houston-based Vertex Energy is a speciality refiner of alternative feedstocks and marketer of refined products. The company is one of the largest processors of used motor oil in the USA, with operations located in Houston and Port Arthur, Texas, Marrero, Los Angeles, and Heartland, Ohio.
Vertex also co-owns a facility, Myrtle Grove, located on an industrial complex along the Gulf Coast in Belle Chasse, Los Angeles.
Idemitsu Apollo Corporation distributes petroleum products worldwide, including gasoline, kerosene, distillate fuel oils, residual fuel oils, and lubricants. The company is part of Japanese energy company Idemitsu Kosan, which owns and operates oil platforms and refineries, and produces and sells petroleum, oils, and petrochemical products, and also operates gas stations under the Apollo Station brand.