Vertex to pause Mobile renewable fuels refining
US specialty refiner Vertex plans to pause renewable fuels production at its 88,000 b/d Mobile, Alabama, refinery by the end of the year, returning a converted hydrocracker to produce what it says are wider-margin fossil fuel products.
Vertex completed the conversion of the Mobile refinery and produced its first barrels of renewable diesel (RD) in May last year, having bought the refinery from Shell in 2022.
The company plans to use a third quarter turnaround to convert its renewable hydrocracker back to petroleum fuels production and to be up and running by the end of the year, after facing significant macro headwinds for renewable fuels, the company said on an earnings call today.
The decision to return to full fossil fuels production is ultimately a near-term financial decision for the company which has an outstanding $196mn term loan, management said on an earnings call Thursday.
The time line for a return to petroleum product production is contingent on permitting approvals and a successful completion of the turnaround and catalyst change in the unit. Vertex plans to sell its renewable feedstock inventories prior to the conversion.
Vertex said it will retain the flexibility to return to renewable fuels processing should market conditions improve for the fuels, but does not believe headwinds to renewable markets will abate in at least the next year and a half.
Conventional crude and other feedstock throughputs at the Mobile refinery were 64,000 b/d in the first quarter, down from 71,000 b/d in the same three months of 2023. Renewable throughputs were 4,000 b/d in the most recent quarter.
The company expects 68,000-72,000 b/d of conventional crude and other feedstock throughputs in the second quarter and 2,000-4,000 b/d of renewable throughputs.
Vertex reported a first quarter loss of $18mn compared to profits of $54mn in the first quarter of 2023.
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