Vertex Energy Commits to Offtake 100% Over Five Years of Planned Mobile Renewable Diesel Production : Biofuels Digest
In Texas, Vertex Energy, Inc. entered into a 5-year product supply agreement with Idemitsu Apollo Renewable Corporation, a wholly owned California subsidiary of Idemitsu Kosan. The agreement is conditional on certain conditions precedent, including the closing of Vertex’s planned acquisition of the Mobile, Alabama refinery, as previously announced, and the completion of a subsequent conversion of the hydrocracking unit of the Mobile Refinery, a project that will facilitate the production of renewable diesel fuel at the refinery, which is expected to be completed following the closing of the acquisition, by the end of 2022.
Under the terms of its supply agreement with Idemitsu, Vertex will supply 100% of the renewable diesel produced at the Mobile refinery to Idemitsu over the term of the agreement. Additionally, as outlined in the supply agreement, Idemitsu will pay Vertex for each gallon produced at a spot market price indexed at the time of production, resulting in an immediate working capital benefit for Vertex. At current commodity and credit values, and assuming the timely completion of the capital project and continued production at currently projected levels, expected revenues on the five-year agreement would exceed $6 billion. dollars.