Italian oil and gas major Eni SpA (BIT:ENI) has formally entered into the US biofuels market with the establishment of a joint venture with petroleum refiner PBF Energy Inc (NYSE:PBF) to operate a recently-launched biorefinery in Louisiana.
The parties announced on Wednesday the completion of an up to USD-885-million (EUR 810.6m) deal for the establishment of an equally owned business — St Bernard Renewables LLC (SBR) which was unveiled in mid-February.
The biorefinery, which started commercial operation earlier in June, will produce mainly hydrotreated vegetable oil (HVO), commonly known as renewable diesel, with a production capacity of 306 million gallons per year. Its targeted processing capacity is about 1.1 million tonnes yearly of raw materials.
The facility is using technology developed by Eni in cooperation with Honeywell UOP. It will also benefit from its co-location with PBF’s Chalmette refinery through a variety of shared services.
As part of the deal, PBF contributed the biorefinery and other assets comprising the business, while Eni Sustainable Mobility has committed to making capital reimbursements and contributions of a total of USD 835 million to its US partner.
Some USD 431 million of the total investment amount was paid at closing. The rest of the sum will be provided at the commissioning of the pre-treatment unit which is expected in the coming weeks. Additionally, USD 50 million more will be paid upon the achievement of certain project milestones and performance criteria.
The partnership with PBF will increase Eni Sustainable Mobility’s refining capacity to over 1.6 million tons per year and also support its ambition to achieve over three million tons annually by 2025, the company’s CEO Stefano Ballista said.
(USD 1 = EUR 0.915)
