ST. LOUIS — Chevron Corp. and Bunge Ltd. plan to work together to increase supply of renewable fuel. Chevron U.S.A. Inc., a subsidiary of Chevron Corp., and Bunge North America, Inc., a subsidiary of Bunge Ltd., have a memorandum of understanding for a proposed 50/50 joint venture to help meet demand for renewable fuels and to develop lower carbon intensity feedstocks.
St. Louis-based Bunge is expected to contribute its soybean processing facilities in Destrehan, La., and Cairo, Ill. Chevron, San Ramon, Calif., is expected to contribute about $600 million in cash to the joint venture, which aims to establish a reliable supply chain from farmer to fueling station for both companies. The two companies anticipate approximately doubling the combined capacity of the facilities to 7,000 tons per day by the end of 2024.
“As the world’s largest oilseed processor, we are pleased to expand our partnership with an energy industry leader to increase our participation in the development of next generation, renewable fuels,” said Greg Heckman, chief executive officer for Bunge. “Together, we share a commitment to sustainability and reducing carbon in the energy value chain. This relationship with Chevron would enable Bunge to better serve our farmer customers by accessing demand in the growing renewable fuels sector.”
Under the proposed joint venture agreement, Bunge would continue to operate the facilities. Chevron would have offtake rights to the oil for use as renewable feedstock to manufacture diesel and jet fuel with lower lifecycle carbon intensity.
“Through our commercial work with Bunge, we have come to appreciate their strong company culture, their strategic desire to advance the production of lower carbon fuels, their commitment to capital discipline and promotion of sustainable agriculture in their supply chains,” said Mark Nelson, executive vice president of Downstream and Chemicals for Chevron. “Chevron’s proposed joint venture with Bunge positions us to expand into the renewable fuel feedstock value chain, which will advance our higher returns, lower carbon strategy.”
The creation of the proposed joint venture is subject to the negotiation of definitive agreements with customary closing conditions, including regulatory approval.
The joint venture announcement on Sept. 2 follows Chicago-based ADM and Marathon Petroleum Corp., Findlay, Ohio, announcing on Aug. 19 that they agreed to form a joint venture to produce soybean oil that that will meet demand for renewable diesel fuel. A planned soybean processing complex in Spiritwood, ND, is expected to produce about 600 million lbs of refined soybean oil annually, which would be enough feedstock for about 75 million gallons of renewable diesel per year.